DAX Xetra: Support at 11,751/11,710, resistance at 11,783/12,049

There has been a significant change in market tack in the past 24 hours. A whole string of factors have contrived to turn the market back towards the dollar. The dovish comments from the ECB’s Benoit Coeure, the dip into deflation in the UK and the stronger than expected Housing Starts in the US. A triple-whammy of good news and traders have really ran with it. Today is equally as important though for the near term market outlook as we need to see a series of confirmations on these markets to suggest that it was not just a flash in the pan. All too often in recent weeks the dollar has had negated bullish moves as the correction has continued. There is as yet no sign that Treasury yields have reversing their recent gains, whilst I remain concerned that Wall Street is still moving on a “bad news is good” track (extremely strong housing starts caused stocks to consolidate yesterday).
The S&P 500 closed slightly lower by 0.1% although it did make another intraday all-time high. Asian markets have been boosted by the stronger dollar, but also the news that Japanese GDP grew an annualised 2.4% in Q1 which was way above the 1.5% that had been predicted. European markets are mixed at the open.
Forex markets show that the euro is under further pressure today as the European session has got going. This certainly looks to be the end of the recent rally. The dollar looks to be stronger across most of the majors once more today. The stronger dollar is also impacting across precious metals with both gold and silver weaker.
Markets are looking out for the meeting minutes of the Federal Reserve today at 1900BST. The FOMC statement gave a rather uncertain outlook for the prospect of a rate hike and more information over how “transitory” the recent weak economic data is would be of interest. Before that, the Bank of England gives its own minutes with a unanimous call for holding rates expected.