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DAX Index Price Forecast – DAX To Trade Bearish Over Cues from International Markets

Germany equities were lower at the close on Monday, as losses in the Food & Beverages, Construction and Chemicals sectors propelled shares lower. At the close in Frankfurt, the DAX declined 0.64%, while the MDAX index lost 0.90%, and the TecDAX index fell 0.33%. Declining stocks outnumbered rising ones by 469 to 231 and 75 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was up 6.88% to 14.37. The risk averse mood in a holiday thinned market caused European equities to take downtrend movement and the index closed on bearish note yesterday. Asia stocks struggled on Tuesday as a fresh round of U.S.-China tariffs and a surge in oil prices to near four-year highs added to worries about risks to global growth.

Risk Averse Sentiment From Sino-US Trade War Proceedings Hurts Equity Markets Across Globe

China and the United States imposed new tariffs on each other’s goods on Monday and neither side looks to be in the mood to compromise, raising the risk of a protracted battle that could chill investment and disrupt global trade. The tense backdrop added to the general caution ahead of an expected interest rate hike by the Federal Reserve this week and uncertainty over the future of U.S. Deputy Attorney General Rod Rosenstein. Rosenstein oversees the special counsel investigation into Russia’s role in the 2016 presidential election. Wall Street weakness amid the latest flare up in trade conflict concerns is a negative factor for equities. Some markets, like Japan’s, have positive factors to fall back on like the weaker yen, but such support could be negated if the Chinese market is hit by volatility.

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U.S. equities had made strong gains last week as investors had hoped the United States and China would find a way out of the trade impasse, but Monday’s market closed on dovish note for Wall Street. The euro edged lower, having hit a 3-1/2-month high in the previous session after European Central Bank chief Mario Draghi expressed confidence in Eurozone inflation and wages growth. Euro has held level despite strong USD indicating positive support for European markets. DAX Futures which traded in international market was moving near flat with dovish signs ahead of European market hours. DAX is expected to open flat and move range bound with a bearish incline during today’s market hours.

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This article was originally posted on FX Empire

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