- European stocks are trading lower: the risk rebound limits purchases.
- The ECB will meet on Thursday and the European PMIs will meet on Wednesday.
- Eurozone PMI indices are expected to show slight growth.
European stocks initially rose on Tuesday, hitting short-term highs before revising direction again and testing the bottom of recent activity.
European stocks were unable to follow US stocks higher, lacking the same momentum from AI technology stocks that drove the US equity sector back to new highs on Monday.
This week, the European Central Bank (ECB) will once again be firm on interest rates, despite markets' hopes and expectations for faster cuts.
Over the past week, ECB policymakers have done their best to dispel market hopes that rate cuts will begin soon, with some particularly determined investors expecting rate cuts to begin as early as March. Those responsible for the ECB have firmly opposed the markets' exaggeration, setting a more reasonable deadline for the summer months.
European consumer confidence fell in January from -15.0 to -16.1 versus the forecast of -14.3, and the ECB's bank lending survey led to the day's overall losses after it was revealed that bank lending to both consumers and businesses has continued decreasing until the third quarter, and further declines in access to credit facilities are expected until the first quarter of 2024.
The German DAX and the French CAC 40 closed Tuesday down by just over a third of a percentage point. The DAX lost 56.27 points and ended the day at 16,627.09 euros, while the CAC 40 lost 25.21 points to close at 7,388.04 euros, losing 0.34% on the day.
The pan-European STOXX600 index lost 1.33 points and closed with a decrease of 0.28%, at 471.53 euros, and the London FTSO remained practically flat on the day, closing with a slight decrease of 0.3% and a loss of 1.98 points, at 7.485, 73 pounds.
DAX Technical Outlook
The German DAX Index retreated after an early rally on Tuesday, hitting an intraday high above €16,700 before retreating once again. The main stock index is falling into a congestion zone between the 50 and 200 hourly simple moving average (SMA) near €16,600.00.
The DAX is still mostly recovering, rising 1.7% from last week's lows near €16,328.00, but bearish momentum is becoming harder to ignore as the stock index sees frequent declines amid of constant upward movements.
Short-term prices see support at the 50-day SMA at €16,400.00, and a bearish extension would need to cross the $15,800 barrier before extending into a significant downtrend.
DAX Hourly Chart
DAX Daily Chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
