- The German DAX stays above the 25,000-euro level heading into the weekend.
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Fragile Balance Around 25,000 Amid Macro-Driven Uncertainty
The German DAX continues to be very noisy on Friday as we hover above the crucial 25,000-euro level. The 25,000-euro level is an area that obviously attracts a lot of headline noise and, of course, an area that previously has been a bit choppy.
All things being equal, though, the DAX is going to be looking very closely at 10-year yields and also the 10-year yields in not only the United States but Germany. The markets continue to be very hesitant to get overly aggressive as the Middle Eastern headlines continue to confuse.
The situation in Germany, of course, will be highly influenced by whether or not there is going to be enough energy, and at this point in time, that is still an open question. Regardless, it does look like traders are at least willing to take a little bit of a gamble on some type of good resolution to the situation between the Americans and the Iranians.
Fickle Market Conditions
The German DAX, of course, is something that you have to watch very closely because it tends to move the rest of the European Union as well. The market is going to continue to see that the overall attitude of the market is going to be one that's going to be highly fickle, and therefore you need to watch bond yields more than anything else. I would watch the 10-year yield in the United States as well as the 10-year yield in Germany.
The upside, I think, opens up the possibility of a move to 26,000 euros, and I do expect to see that eventually. But we could break down a little bit. Any drop at this point in time, for me at least, looks like value.
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