Money Flow & EU Premarket: Today, U.S. markets are closed for a holiday. A cautious start to the week as markets await the NFP release.

Today, U.S. markets are closed for a public holiday.

Global stocks are starting September cautiously after four months of gains, as China’s efforts to support its struggling economy have not been effective. Asian stocks and the global index are both down, marking the first trading day in what is typically a volatile month for markets. In Hong Kong, the main index is falling, with New World Development Co.’s shares dropping by up to 14% after the debt-ridden developer announced it expects to report its first annual loss in two decades. European futures are showing mixed performance in pre-market trading, while U.S. futures are trading lower in overnight trading. The dollar is slightly weaker, and government bond trading is closed due to the U.S. Labor Day holiday. Global funds are positioning for major central banks, including the Federal Reserve, to lower interest rates in September. Meanwhile, multiple stimulus efforts in China have failed to revive growth, with a prolonged slump in the real estate market limiting domestic demand in the world’s second-largest economy. A senior economist for Asia at Union Bancaire Privée expressed concern about the situation in China. Although the fourth quarter is likely to be positive for Chinese risk assets due to efforts to support domestic demand, he added that there isn’t enough room for large-scale stimulus measures like in 2009. Caixin’s manufacturing data from China unexpectedly showed an increase on Monday, but this didn’t change the overall sentiment as the official manufacturing activity index contracted for the fourth consecutive month in August. Recent housing sales data showed a worsening decline in the housing sector, with China Vanke Co. reporting its first loss in over two decades. China also threatened severe economic sanctions against Japan if Tokyo further restricts the sale and servicing of chip-making equipment to Chinese firms.

September Concerns

September is historically a volatile month for global markets. It has been one of the worst months for stocks over the past four years, while the dollar usually performs better, according to data. The Cboe Volatility Index (VIX) has risen every September for the past three years. This month may not be different, as Friday’s key U.S. jobs report will serve as a guide for how quickly or slowly the Fed will cut interest rates. Traders are betting that the Fed’s easing cycle will begin this month, with about a 25% chance of a 50 basis point cut, according to data. Meanwhile, European Central Bank Governing Council member François Villeroy de Galhau supported a rate cut in September after data showed a significant slowdown in inflation. In other news, German Chancellor Olaf Scholz’s coalition was punished in two regional elections in the east of the country on Sunday, with the far-right party achieving its first victory at the state level since World War II. However, the chances of the far-right party forming a government remain low, as it is isolated by other parties in parliament. In commodities, oil prices remain unchanged amid signs that OPEC+ will proceed with plans to increase production from October, while economic headwinds in China continue to grow. Gold prices are falling.

Technical Outlook: DAX Futures Daily

I expect the price to move towards testing the support of the mini-trend channel and the horizontal support around the 18,900 zone during today’s session. If it breaks below this level, the price is likely to move towards testing the horizontal support around the 18,780 zone.

Alternatively:

If it breaks above the all-time high (ATH) levels around the 18,970 zone, the price is likely to move towards testing the psychological resistance around the 19,000 zone.