Dax Index News: Bulls Eye 23,000 Amid Trade Data and Central Bank Signals

DAX Dips Amid US Tariff Uncertainty

The DAX ended its four-day winning streak as market focus shifted back to US tariff threats and the risk of a US-EU trade war. On Friday, February 14, the DAX dropped by 0.44%, partially reversing Thursday’s 2.09% breakout to close at 22,513.

Sector Highlights: Healthcare Stocks Pressure the DAX

Rheinmetall AG soared 7.93% as investors expect the EU to ramp up defense spending.

However, Fresenius Medical Care AG tumbled 5.21% after US Dialysis DaVita (DVA) forecast below-estimate annual profits. Siemens Healthineers AG declined by 1.21% amid a broader healthcare sector retreat.

German Wholesale Prices Bounce

Economic data from Germany questioned investor expectations for aggressive ECB rate cuts.

German Wholesale Prices rose 0.9% year-on-year in January, up from 0.1% in December. The upswing was significant as economists consider wholesale prices a leading inflation indicator. Higher prices could signal increasing demand-driven inflationary pressures, potentially leading to fewer ECB rate cuts.

Higher borrowing costs could strain corporate earnings and valuations. If the ECB adopts a less dovish stance, demand for the EUR may rise, strengthening the currency.

The EUR/USD gained 0.22% on February 14, adding to Thursday’s 0.79% rally to close at $1.04870. A stronger EUR could impact overseas earnings and demand for German goods.

Eurozone Trade Data Could Spark US Tariff Threats

On Monday, February 17, trade data for the Eurozone will require consideration amid threats of US tariffs.

Economists expect the Eurozone’s trade surplus to widen from €16.4 billion in November to €33 billion in December. Import and export trends will provide traders with insights into the demand environment. However, trade terms with the US could potentially draw more scrutiny.

The EU’s trade surplus with the US widened from €15.9 billion in November 2023 to €18.7 billion in November 2024. Exports to the US rose 1.6%, while imports from the US dropped by 6.9% year-on-year. Similar trends in December could prompt fresh tariff threats from President Trump, potentially impacting the DAX.

US Retail Sales Boost Fed Rate Cut Expectations

Meanwhile, US retail sales declined by 0.9% month-on-month in January after rising 0.7% in December. Weaker consumer spending could dampen demand-driven inflation, supporting an H1 2025 Fed rate cut. However, analysts cited adverse weather, wildfires, and potential tariff-driven inflation as reasons for the pullback.

Despite weaker consumer spending, the US labor market remains tight, sustaining wage growth and challenging expectations for a Fed rate cut. Strong wage growth could fuel consumer spending and demand-driven inflation.

US Markets Mixed Amid Tariff Concerns

US equity markets had a mixed session on Friday, February 14, as investors considered US data and ongoing tariff threats. The Nasdaq Composite Index gained 0.41%, while the Dow and S&P 500 fell 0.37% and 0.01%, respectively.

Airbnb (ABNB) rallied 14.45% on upbeat earnings, while Apple Inc. (AAPL), and Nvidia (NVDA) advanced by 1.27% and 2.63%, contributing to the Nasdaq’s gains.

In the bond markets, 10-year US Treasury yields dropped to a session low of 4.447%, reflecting expectations for a more accommodative Fed policy.

Key Focus: Fed Speakers and Trade Developments

On Monday, February 17, traders should monitor FOMC members’ commentary. Reactions to recent inflation, retail sales data, and insights into the Fed’s rate path could influence risk sentiment. The Fed’s Patrick Harker and Michelle Bowman are on the calendar to speak late in the European session.

Beyond the economic calendar, trade developments also require consideration, with potential US tariff threats remaining a key market driver.

Near-Term Outlook

The DAX’s performance hinges on Eurozone trade data and central bank forward guidance.

• Weaker trade data and dovish central bank forward guidance could drive the DAX toward 23,000.
• Upbeat trade data and a hawkish Fed policy stance may weigh on rate-sensitive German stocks, potentially pulling the Index toward 22,000.

US trade policy and geopolitical tensions remain major risks. Escalating US-EU trade disputes could weigh on export-driven German stocks, while signs of constructive trade talks may drive the DAX to fresh highs.

As of Monday morning, futures indicated a positive start to the week. DAX futures gained 38 points, while the Nasdaq 100 mini climbed 75 points.

DAX Technical Indicators

Daily Chart

Despite Friday’s retreat, the DAX remains well above the 50-day and 200-day Exponential Moving Averages (EMAs). The EMAs confirm bullish price trends.

A return to the February 13 record high of 22,625 could enable the bulls to target 22,750 next. A breakout from 22,750 may signal a move toward 23,000.

Conversely, if the DAX breaks below 22,500, the bears may target the 22,350 level next.

With the 14-day Relative Strength Index (RSI) at 76.79, the DAX remains in overbought territory (above 70 RSI). Selling pressure may increase at the record high of 22,625.

Conclusion: Key Drivers to Watch

Traders should monitor Eurozone trade data, particularly trade terms with the US, and central bank commentary for market direction.

Additionally, tariff developments and Ukraine war-related news will also influence risk sentiment.

Access our latest analysis here for a deeper dive into how global market dynamics influence the DAX.