European stocks rally after strong Daimler earnings

European equities rose today after strong car registration numbers and positive quarterly results from Daimler. In Germany, the DAX rose by 0.90% while in the UK, the FTSE 100 rose by 1.26%. The Euro Stoxx 50 index rose by more than 1%. Data showed that registrations rose by 5.6% in Germany, 62.4% in France, and by 276% in the United Kingdom. On corporate earnings, Daimler said that it made an EBIT of more than €3.07 billion, which was higher than the consensus forecast of €2.49 billion. Mercedes-Benz cars had an EBIT of €2.12 billion while trucks and vans rose to €541 million.

The euro rose against the US dollar and sterling as the market reacted to the mild consumer inflation data from Europe. According to Eurostat, consumer prices rose by 0.1% in September, leading to an annualised decline of 0.3%. At the same time, the core consumer inflation rose by 0.2% on a month-on-month and year-on-year basis. The weak inflation was partly because of a reduction of value-added tax in most EU member states. Further data showed that the bloc’s trade surplus narrowed from €27.7 billion to €14.7 billion. 

The US dollar index dropped as investors ignored the rising number of Covid-19 cases in Europe and the US. The dollar index dropped by 0.25%, erasing some of the gains it made yesterday. The currency also reacted to retail sales numbers from the United States. According to the Commerce Department, the volume of retail sales rose by 1.9% and by an annualised rate of 5.36%. Further, the core retail sales rose by 1.5% and by a YoY rate of 5.4%. These numbers are significantly lower than the double-digit growth experienced in May. However, analysts fear the USD will remain to be under pressure until congress passes another stimulus package.

EUR/USD

The EUR/USD price rose from an intraday low of 1.1687 to a high of 1.1740. On the hourly chart, the 14-day and 28-day exponential moving averages (EMAs) have made a bullish crossover while the RSI has jumped close to the overbought level of 70. The price is also slightly below the important level of 1.1750. Therefore, with bulls in control, I suspect that the price will continue rising as they attempt to end the week above 1.1750.

GER30

The DAX index pared back yesterday’s losses and soared to an intraday high of €12,585. On the hourly chart, the price is along the 50% Fibonacci retracement level. It has also moved above the middle line of the Donchian channels and the 25-period and 15-period moving averages. The RSI has moved from the oversold level of 13 to the current 53. Therefore, the index is likely to end the week slightly higher than the current level as buyers aim for the resistance at €12,900.

ETH/USD

The ETH/USD and other digital currencies tumbled today after the OKEx exchange suspended withdrawals. The ETH/USD reached an intraday low of 359.9, which was the lowest level since October 9. The price is still below the 25-day and 15-day exponential moving averages. It is also slightly below the descending pink trendline while the Relative Strength Index (RSI) has dropped from a high of 75 to the current 44. Therefore, the price is likely to remain under pressure as bears aim for the next support at 350.