DAX Report – The week ahead – 29th February through to 4th March 2016

ECONOMIC CALENDAR
(All times GMT)
Monday – 29th February
7am – German retail sales (January): retail sales are expected to rise by 0.2% from a 0.2% decline in December on a MoM basis. YoY, retail sales are tipped to come in at 2.1%, up from 1.5% in the previous reading.
9.30am – UK mortgage approvals (January): mortgage approvals are anticipated to rise by 260 to 71,100. 
10am – Eurozone CPI (February, flash): MoM CPI is tipped to fall from 0.3% to 0.1%. The forecast for YoY core CPI is for 0.8%, down from 1%. 
3pm – US pending home sales (January): MoM expected 0.9%, prior 0.1%. YoY expected 3.89%, prior 4.2%. 
11.30pm – Japan unemployment (January): unemployment is tipped to fall from 3.3% to 3.2%. 

Tuesday – 1st March

12am – China FX reserves (February): FX reserves are expected to fall to $3.159 trillion from $3.23 trillion

1am – China manufacturing PMI (February) and non-manufacturing PMI (February): manufacturing is anticipated to fall from 49.4 to 49.34. Non-manufacturing is expected to fall to 53.47 from 53.5.

1.45am – Caixin China manufacturing PMI (February):   expected 48.53, prior 48.4.

3.30am – Australia interest rate decision and statement: the forecast is for rates to be held at 2%.

4.30am:  Fed member William Dudley is speaking in Hangzhou

8.55am – Germany unemployment change (February) and unemployment rate (February): unemployment is anticipated to decline by 6,000 which compares with the 20,000 decline in January. Unemployment rate is expected to remain at 6.2%.
8:55am – German manufacturing PMI : expected 50.2, prior 50.2

9am – eurozone manufacturing PMI (February): manufacturing is expected to fall to 51 from 52.3.

9.30am – UK manufacturing PMI (February): expected 52.38, prior 52.9.

1.30pm – Canada GDP (Q4): QoQ expected -0.19%, prior 0.6%. YoY expected -0.3%, prior 2.3%.

3pm – US ISM manufacturing (February): manufacturing is tipped to come at 48.45, up from 48.2.

Wednesday – 2nd March

12.30am – Australia GDP (Q4): expected QoQ 0.78%, prior 0.9%. Expected YoY 2.85%, prior 2.5%
1.15pm – US ADP employment (February): the forecast is for employment to rise by 218,700, up from 205,000

3pm: Fed member John Williams is speaking in California
3.30pm – US oil inventories: stockpiles are tipped to fall to 1.1 million barrels from 3.5 million barrels
7pm – US beige book: provides a snapshot of the US economy.

Thursday – 3rd March

Earnings :-

 – Adidas AG (ADSGN) – Full Year earnings – 11am/2pm GMT – 1.85% Index weighting
–  Continental AG (CONG) – Full Year earnings – 12pm GMT – 2.61% Index weighting
– Vonovia (VNAn) – Q4 2015 – 1pm GMT 

1.45am – Caixin China services PMI (February): the services sector is expected to slip to a reading 51.27 from 52.4.
9.30am – UK services PMI (February): expected 55.78, prior 55.6.
1.30pm – US jobless claims: jobless claims is anticipated to fall from 274,000 to 272,000.
2.45pm – US services PMI (February): the consensus is for a reading of 49.8, down from 53.2.
3pm – US ISM non-manufacturing (February): the forecast is for non-manufacturing to fall to 53.45 from 53.5

Friday – 4th March

1.30pm – Canada trade balance (January): the deficit is expected to widen to C$ 0.9 billion from C$ 0.59 billion.

1.30pm – US non-farm payrolls (February), average hourly earnings (February) and unemployment rate (February): non-farm payrolls: expected 222,000, prior 151,000. Average hourly earnings: MoM expected 0.07%, prior 0.5%. YoY expected 2.5%, pervious 2.5%. Unemployment is expected to remain at 4.9%. 

An eventful week coming up for global equity markets, with data out of Europe, U.S., China, Australia and Canada. Be aware on Tuesday, U.S. Federal Reserve member William Dudley is speaking in Hangzhou & John Williams will be speaking in California at 3pm GMT.  Traders will be looking for any hints as to either the direction or timeline of further possible rate rises this year from the U.S. Central Bank. Then on Friday the all important NFP report out at 1:30pm GMT which acts a good gauge as to the strength and robustness of the U.S. economy.

Events with a direct effect on the DAX, straight off the bat we have data released 7am GMT on Monday morning with German Retail Sales expected to come out better than expected,  the European CPI number out at 10am, which is forecast to fall to 0.1% from 0.3% MoM.  On Tuesday all eyes will be on the German Manufacturing number with a forecast of 50.2 and also on German Unemployment, followed up by the European PMI number at 9am GMT which is expected to fall to 51 from 52.3
On Thursday, we have earnings releases from Adidas, Continental and Vonovia.

Looking at a Weekly chart of the DAX below, one can see strength has remained intact for Europe’s strongest economy as the Index remained above the Weekly 200 moving average (green line in the chart below).  The Weekly 200 MA is an important barometer as to the overall consensus in a marketplace, with trader sentiment being Bullish when price remains above this level, conversely Bearish when below.  This is the second week in a row the DAX has closed above the Weekly 200 MA.

(click to enlarge)

Bull Targets for the week ahead :-

• 9586/9575 zone
• 9630/9612 zone
• 9615 – Weekly R1 Pivot
• 9745/9720 zone
• 9742 – 38% pullback from Nov 15 high – Feb 16 low
• 9850 – Weekly R2 Pivot
• 9899 – 61.8% pullback from Oct 14 low – Apr 15 high
• 9926 – Weekly high 24th Jan 16
• 10064 – 50% pullback from Nov 15 high – Feb 16 low
• Daily 100 MA – currently 10242
• Weekly 100 MA – currently 10302
• 10379 – 50% pullback from Oct 14 low – Apr 15 high
• 10387 – 61.8% pullback from Nov 15 high – Feb 16 low

Bear Targets for the week ahead :-

• 9469/9458 zone
• 9433/9425 zone
• 9384
• 9352
• 9320 – Weekly Pivot
• 9276/9228 zone
• 9123/9078 zone
• Weekly 200 MA – currently 9115
• 9085 – Weekly S1 Pivot
• 8993
• 8919/8846 zone
• 8697 – Feb 16 low

Good fortune in your trading for the week ahead – it’s going to be a volatile one!

And remember…

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