DAX starts key week with a stall

A light fillip to risk from China’s stimulus tweak was short-lived

In Europe, the latest soft print of German data (imports and exports fell hard in February) set the tone, tilting sentiment to the cautious side. The backdrop is U.S.-China trade talks that ended on Friday with progress but no conclusive deal. Discussions are scheduled to continue this week.

Key risk events:

Markets price almost zero risk that the EU won’t grant the UK another extension when the bloc meets on Wednesday, the key uncertainty being how long
How Mario Draghi reiterates downside risks at the ECB’s press conference on Wednesday will establish whether they’ve worsened or improved. Fine LTRO/rate details aren’t expected till June
FOMC minutes (Wednesday) may hold clues on balance sheet reduction and any members leaning towards a cut
Macroeconomic highlights: U.S. inflation and UK growth data on Wednesday; China’s trade and inflation readings on Thursday; Germany’s final CPI on Friday

Germany’s DAX stalls at 2019 highs

The index is navigating back to a multi-year rising trend smashed at year-end. Right now, exhausted momentum leaves price in poor shape to tackle sensitive levels:

The critical 61.8% (12289) interval of the decline from January 2018’s record high to December’s bottom
12046: 10th September’s high that preceded volatility before a modest advance
Current consolidation puts 11950 September lows at risk; before flimsy-looking 11903
March 2018 swing lows, particularly near 11250, are visually the most solid
Selling could still test the lower wall of a channel sketched since January, eyeing 11400s

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