The German Dax index started the trading day on Friday in a negative trend. By 9:30 am, the leading index was calculated at around 22,795 points, a 0.9 percent decrease from the previous day’s close.
According to Jochen Stanzl, chief market analyst at CMC Markets, the Dax index was impacted by the reality of a trade war, as described by European Central Bank President Christine Lagarde, which could potentially hinder the efforts to boost the growth of the German economy. However, Stanzl noted that the index was still above the 22,100-point mark and that a decline in the stock market is a normal and healthy phenomenon.
Friday’s decisive meeting of the Federal Council to discuss the historic financial package coincides with the so-called “Witch’s Sabbath” a term used to describe the triple expiration day on global derivatives exchanges. While the former is seen as a mere formality, the market developments over the four-day period in question are difficult to predict.
It is impossible to forecast possible movements and set price targets based on the strike prices of options and the largest positions at the end of the day are only a part of the whole. The term “Witch’s Sabbath” may sound mystical, but is ultimately a myth. “In the lead-up, much is written about it, but the insight gained is generally limited once it has passed” Stanzl said. “There are so many other factors influencing the development of the stock market, so that one cannot determine price targets solely on the basis of the expiration day.”
The European common currency was weaker on Friday morning, with one euro costing around 1.0825 US dollars and one dollar being equivalent to 0.9238 euros.