German stocks pare gains on Mercedes owner woes
Global stocks were mixed today as the market focused on corporate earnings and the SARS-like virus that is spreading China. Asia Pacific stocks rose while those in Europe fell. In Asia, the China A50, Nikkei, and Hang Seng indexes rose by 38, 168, and 355 respectively. In Europe, the DAX index rose by 7.5 points while the Stoxx and CAC 40 indices declined by 5.60 and 2 points respectively. Meanwhile, in the United States, futures tied to the Dow Jones Industrial Average and Nasdaq rose by 90 and 60 points respectively. The corporate earnings to watch today will be from Baker Hughes, Ally Financial, Abbott Laboratories, and Northern Trust among others.
The DAX index rose slightly today as the markets focused on the US and European Union relationship on trade. Donald Trump, who is attending the World Economic Forum, warned the European Union that he would levy high tariffs on goods. He complained about the high trade deficit the US has with the EU. Trump has never liked the European Union, which he believes was formed to challenge the US. Meanwhile, the market reacted to the news from Daimler, the owner of Mercedes Benz. The company warned that the Dieselgate scandal will cost the company more than €1.5 billion. The company said that its EBITDA, excluding legal expenses, would be halved, from €11 billion in 2018 to €5.6 billion in 2019.
The Canadian dollar rose against the USD ahead of the interest rates decision by the Bank of Canada. The bank is expected to leave rates unchanged at 1.75%. There is also a possibility that officials will point to a rate cut later this year. This is because Canada has released some weak data in the past few months. Just today, the country released weak inflation numbers. Data from Statistics Canada showed that the core CPI dropped from the previous 1.9% to 1.7%. The headline CPI was unchanged at 2.2%.
The GER30 rose to an intraday high of €13,643. It then eased slightly and dropped to a low of €13,546 as Daimler announced the new Dieselgate charges. The index is still trading near its all-time high. The price is above the 14-day and 28-day exponential moving averages on the daily chart. The 14-day exponential moving averages have remained slightly below the overbought level of 70. The momentum indicator is also moving in a sideways direction. The pair will likely continue rallying in the coming days.
The GBP/USD pair soared today as the market continued to react to the positive UK employment data. The pair rose to an intraday high of 1.3110, which is along the upper line of the Bollinger Bands. The price is also along the 100% Fibonacci Retracement level while the RSI has moved above the overbought level. The same is true with the main and signal level lines of the Stochastic Oscillator. The pair may find some resistance at the current level.
The USD/CAD pair declined sharply today as the market received the CPI data from Canada. The pair dropped from an intraday high of 1.3092 to an intraday low of 1.3035. The pair is trading along the lower line of the Bollinger Bands. The price is below the 28-day exponential moving averages on the hourly chart. The RSI has dropped to the oversold level. The pair may decline to test the important support of 1.3027 ahead of the BOC decision.