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DAX 40 Correction in the Bond market Supports the Index

12/1/2022 1:39 PM

The Frankfurt Stock Exchange's leading index, the DAX 40, corrects higher to trade at 14587.0 on the back of a correction in the bond market.

After the release of extremely weak statistics on the labor market, corporate news receded into the background. The number of unemployed in Germany in November increased by 17.0 thousand after an increase of 9.0 thousand in the previous month, while analysts expected an increase of 13.0 thousand. In turn, the overall Unemployment Rate in the country corrected to 5.6% from 5.5% a month earlier. The constant increase in the number of unemployed citizens has been going on since May, which is an extremely negative signal for the country's economy.

The only growth driver for DAX 40 quotes remains the dynamics in the debt market. Since the beginning of trading, the entire line of bonds has been actively declining: popular 10-year German treasuries are losing 3.11% and are trading at a yield of 1.885%, long-term 20-year-old ones are losing 2.09% with a yield of 1.917%, and global 30-year bonds support the overall trend, declining by 2.00%.

The growth leaders in the index are Infineon AG (+3.01%), Mercedes Benz Group AG (+2.97%), Deutsche Börse AG (+1.97%), BMW AG (+1.84%).

Among the leaders of the decline are Siemens AG (-1.40%), Vonovia SE (-1.30%), BASF SE (-1.11%).

On the daily chart of the asset, the price is trading well above the descending channel resistance line, reaching highs in the late spring of this year.

Technical indicators maintain a steady buy signal: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram, being deep in the buy zone, is forming new descending bars.

Support levels: 14260.0, 13430.0. | Resistance levels: 14830.0, 15540.0.

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