. European Stocks Largely Higher; DAX Underperforms After Trade Deficit

European Stocks Largely Higher; DAX Underperforms After Trade Deficit 

04 Jul 2022

FTSE 100 is trading up 0.65% at 7196.67

European stock markets edged largely higher Monday, starting the new week on a positive note despite the Wall Street holiday limiting activity.

By 03:40 AM ET (0740 GMT), the DAX in Germany traded 0.1% lower, while the CAC 40 in France rose 0.5%, and the UK’s FTSE 100 climbed 0.9%.

Global markets are trying to take a more positive view at the start of the second half of the year, after suffering sharp losses year-to-date as tightening government policies and rising living costs suggested an elevated risk of the global economy heading into a growth slowdown.

That said, it’s difficult to see these gains lasting for long as the latest German trade data illustrated the difficulties the Eurozone’s main growth driver is having to battle.

Germany posted its first monthly trade deficit in over 30 years in May as the price of its oil and gas imports soared as a result of Russia’s war in Ukraine. At the same time, exports fell for the third time in five months, not helped by the COVID restrictions in parts of China, one of Germany’s main export markets.

Activity will be limited Monday, given the July 4th holiday in the United States and ahead of the keenly awaited monthly U.S. employment report.

Recent economic data has added to signs that the U.S. economy, a key global growth driver, is cooling amid aggressive policy tightening by the Fed, so Friday’s nonfarm payrolls report will be studied carefully for how the labor market is performing, given the Fed’s inflation/employment mandate.

On technical fronts FTSE 100 RSI stood at 53.40 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss:

TRADE SIGNAL – : FTSE 100 – BUY: 7198.20, TARGET: 7231.40, STOP LOSS: 7166.90