This index predicts future price fluctuations

Dusseldorf Prices that move sideways or even fall can unsettle investors when it comes to investing in shares. The trading volumes in recent weeks have been correspondingly low. “We currently have a dominant downward trend,” says Handelsblatt finance editor Jürgen Röder. “In addition, we had a total of two recovery phases, which in retrospect turned out to be bear market rallies. Only with Dax values ​​of over 15,000 points could this downward trend turn again. But we are still a long way from that.”

But even in uncertain times, the volatile Dax can also offer opportunities. The Dax Volatility Index (VDax) indicates the implied volatility of the leading German index in percentage points. “If the Dax falls, the fear barometer on the stock market rises. This provides information about how professionals behave on the futures market and what can be expected for the next 30 days,” explains Röder.

In this episode of Handelsblatt Today with host Sonja Schlacht, Jürgen Röder explains how the VDax figures are to be interpreted and how they can be helpful for investors.

Italy in government crisis

Also: The energy crisis, an immense drought and Corona: Italy, like other European countries, is currently struggling with many challenges. On Thursday, Italy’s current Prime Minister Mario Draghi proposed his resignation to President Sergio Mattarella. Government crises are part of everyday political life in the EU’s third-largest European economy – this crisis, however, comes at a time when the country is beset by great uncertainty.

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Although Draghi passed a previous vote of confidence in the Senate, the Five Star Movement (Movimento 5 Stelle) stayed away from this vote. The five stars is one of four coalition partners of the incumbent Italian government. A setback for non-party economist Draghi, who only wanted to lead with the full backing of his partners at the top.

Draghi’s resignation was initially rejected by President Mattarella. But the situation is not only problematic for Italy. The yield on Italian government bonds rose to over 3.5 percent on Thursday. The spread to German bonds has thus widened. This has consequences for Europe and the European Central Bank (ECB), which actually wanted to prevent such spreads in the future with a new instrument. In the Handelsblatt Today podcast, host Sonja Schlacht talks about this with Handelsblatt financial editor Andreas Neuhaus.

More: Draghi or nothing: without its head of government, Italy is also dragging Europe into the crisis

Exclusive offer for Handelsblatt Today listeners: Test Handelsblatt Premium for 6 weeks for €1 and stay informed about what’s moving the financial markets. With a bit of luck you can also win a Kindle e-reader. More information is available here.
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