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DAX 40 Investors Fear the Development of a Banking Crisis in the EU

3/29/2023 11:26 AM

The leading index of the Frankfurt Stock Exchange DAX 40 is correcting, trading at around 15227.0.

The German stock market is trying to continue the positive dynamics, which is constrained by investors' fears about the stability of the EU banking system after the bankruptcy of Credit Suisse Group AG. In addition, in recent days, traders have been concerned about the situation around the large German bank Deutsche Bank AG, which may have difficulties in fulfilling credit obligations. This assumption was made after the bank's Credit Default Swaps (CDS) began to rise, which happens extremely rarely and only in case of a real threat to the stability of the issuer. It is not yet known for certain what caused the growth in the volume of transactions in these securities, the anxious mood of some investors or insider deals, but shares of Deutsche Bank AG lost 14% at the moment.

On the German public debt market, bonds continue to trade close to year lows, with 10-year bonds trading at 2.287% after hitting 2.725% in the first week of March. In addition, an auction was held yesterday to place 2-year bonds, the rate on which amounted to 2.620%, having decreased from 3.140%.

The growth leaders in the index are HeidelbergCement AG (+2.04%), Siemens Energy AG (+1.89%), Continental AG (+1.70%), Commerzbank AG (+1.58%).

Among the leaders of the decline are Vonovia SE (-6.03%), Infineon AG (-3.13%), Qiagen AG (-1.58%).

On the daily chart, the price is trading in an uptrend, holding within the local ascending corridor with dynamic boundaries of 16300.0–15000.0.

Technical indicators do not give a stable signal, changing it almost weekly: fast EMAs on the Alligator indicator are approaching the signal line, and the AO histogram is forming upward bars being in the sale zone.

Support levels: 15000.0, 14600.0. | Resistance levels: 15350.0, 15670.0.

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