GER30 Analysis – 8 February 2022
GER30 – H4
Last week, Ms Lagarde had refrained from repeating previous statement that interest rate hikes in 2022 are very unlikely, as it did not rule it out, when asked. This was a significant change in tone and received as a hawkish pivot by the markets, harming the German index.
In her appearance at the European Parliament yesterday though, the President of the ECB seemed to try to walk this back a little bit, while reiterating that "There is a defined sequencing between the end of our net asset purchases and the lift-off date. A rate hike will not occur before our net asset purchases finish". [1]
The ECB is has announced the conclusion of its pandemic emergency purchase programme (PEPP) at the end of March. Asset purchases will continue under the APP, which will amount to €40 billion in the second quarter of 2022 and €30 billion in the third quarter. From October onwards, the Governing Council will maintain net asset purchases under the APP at a monthly pace of €20 billion for as long as necessary.
Market sentiment is upbeat today, while the Euro's retreat helps the GER30, which comes closer to key resistance area at around 15,530-15,630. This includes the Daily Ichimoku Cloud, the EMA200 and the descending trend-line from January's record highs. Daily closes above this area will likely give control back to the bulls and the chance to push towards 15,973, although it may be early for this.
Despite the jovial mood, GER30 remains in a precarious position, after three consecutive losing weeks. As such, it is vulnerable to new month lows (15,059), but a larger and sustained decline below 14,840-10, will require a catalyst.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
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