Summary:
- Trump steps up pressure on Germany
- DAX (DE30) bounced off the 12070 pts handle
- BASF (BAS.DE) sinks on Trump’s Nord Stream remarks
First half of the Thursday’s European trading session is quite upbeat. Broad gains can be spotted across the Old Continent with Austrian and Italian equities outperforming the most. Some underperformance can be spotted in the eastern part of the continent as Russian and Polish stocks trade more or less flat at press time.
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Taking a look at DE30 on the H4 interval one can see that bulls managed to defend the support level at 12070 pts handle. In case upbeat moods prevail, we cannot rule out an upward move towards the local peak from 11 June. Price zone ranging around 12280 pts handle is the nearest key resistance, a place that saw the beginning of the latest downward impulse. Source: xStation5
Donald Trump steps up pressure on Germany
The US President, Donald Trump, stepped up pressure on Germany over its support for the Nord Stream 2 pipeline. During yesterday’s press conference with the Polish President, Andrzej Duda, Trump said that “the US is protecting Germany from Russian and Germany is paying Russia billions for its gas”. Trump said that with Merkel’s continued support for the Nord Stream 2, Germany risks being targeted by the United States. Trump also reiterated that Germany is not spending enough on defense and, in turn, the United States may decide to withdraw its troops from there. These remarks show further deterioration in, once strong, German-US ties. However, the US attempts to block Nord Stream 2 project are not entirely about concerns of Russia expanding its influence - Trump hopes that the US could export its LNG to Europe but it may not be competitive to the Russian product. Meanwhile, Russia responded to the US president saying he is engaging in “nothing other than blackmail and a form of unfair competition.
DAX members at 10:39 am BST. Source: Bloomberg
Company News
BASF (BAS.DE) is one of the worst performing DAX stocks at press time. Company share price is falling on the back of the aforementioned Trump’s Nord Stream 2 comments. BASF is one of the companies involved in the development of the Nord Stream 2 pipeline. Among other companies involved one can find the French Engie (ENGI.FR), the Austrian OMV (OMV.DE) or the Dutch Shell (RDSA.NL).
On the other side of the DAX quotation board we have Wirecard (WDI.DE). The German payments company gains on an upgrade at Berenberg. The Bank’s analysts reinstated “buy” rating on the stock, saying that the company is operating as usual. However, they have acknowledged the fact that the company faces potential downside risks due to ongoing investigations. Let us recall that the company dropped “buy” rating on Wirecard on the back of the latest turmoil concerning Financial Times reports.
Telefonica Deutschland (O2D.DE) informed that it has acquired 90 MHz spectrum in the German 5G frequency auction. Company now has a mobile spectrum of around 310 MHz.
BASF (BAS.DE) defended the support level at €57.75 handle. The stock is slowly approaching the resistance zone ranging around the €64.85 handle. A break above it could pave the way towards the €70 handle but one should be wary that the stock is likely to remain sensitive to any Nord Stream 2 deliberations. Source: xStation5
