DAX Index News: Can DAX Weather German Trade Slowdown and Tariff Risks?

DAX Gains on ECB Rate Cut: Can the DAX Target Fresh Highs?

On Thursday, December 12, the DAX advanced by 0.13%, following Wednesday’s 0.34% gain, closing at 20,426.

Auto Stocks Outperform

On Thursday, auto stocks led gains, with BMW climbing 1.91%. Mercedes Benz Group (+1.02%), Volkswagen (+0.86%), and Porsche (+0.36%) also ended the session in positive territory.

Meanwhile, defense and aerospace stocks extended their gains from Wednesday. Rheinmetall AG gained 1.29%, with MTU Aero rising 0.77%, fueled by Ukraine’s recent military activity targeting Russia.

ECB Cuts Rates; EUR/USD Weakens

On Thursday, the ECB cut interest rates by 25 basis points, in line with expectations. ECB President Christine Lagarde noted that policymakers had considered a larger, 50-basis-point reduction. However, Lagarde emphasized that future moves would remain data-dependent.

The ECB’s lack of commitment to further rate cuts limited Thursday’s gains. Investors were hoping for hints of multiple rate cuts to bolster the Eurozone economy.

The rate cut weighed on the EUR/USD, falling 0.28% to $1.04661. A weaker euro could boost German exports. Additionally, lower borrowing costs might enhance corporate profitability.

Expert Views on the ECB Monetary Policy Decision

Daniel Kral, European Macro Specialist at Oxford Economics, remarked on the ECB decision, stating,

“No surprises re ECB’s decision and statement today – another 25bps rate cut, more to come. Inflation is around target, the economy & domestic demand weak, labour market softening in some member states (mainly Germany). Energy prices not helpful in near-term but ECB will look past it.”

German Trade in Focus as US Tariff Threat Lingers

On Friday, December 13, German trade data drew investor interest amid growth concerns about the German economy.

Exports declined by 2.8% month-on-month in October after falling 1.7% in September. Export trends reflected weakening global demand. Imports also declined, suggesting waning domestic demand as Germany’s labor market falters.

US Producer Prices and Jobless Claims Impact Risk Sentiment

In the US, producer prices increased by 3.0% in November, up from October’s 2.7%. Higher producer prices could signal rising consumer prices as producers pass on rising costs to consumers.

However, initial jobless claims increased from 225k in the week ending November 30 to 242k in the week ending December 7, the highest level since October 2024.

The conflicting data fueled uncertainty about the Federal Reserve’s rate path. While rising producer prices suggested the need for tighter monetary policy, signs of labor market weakness raised the possibility of more aggressive rate cuts to avoid a hard economic landing.

According to the CME FedWatch Tool, the probability of a 25-basis point December Fed rate cut dipped from 97.5% on Wednesday to 96.4% on Thursday.

US Markets Retreat: Eyes on Fed Policy

US equity markets ended the Thursday session in the red, reflecting investor concerns about the labor market. The Nasdaq Composite Index and the S&P 500 dropped by 0.61% and 0.66%, respectively, while the Dow declined by 0.54%, extending its losing streak to six sessions.

Adobe Inc. (ADBE) caught the market headlines, plunging 13.69% after releasing underwhelming 2025 revenue forecasts.

Near-Term Outlook

In the near term, DAX trends hinge on central bank policies, US tariff developments, and stimulus measures from Beijing.

Support for multiple ECB and Fed rate cuts, alongside China stimulus targeting domestic consumption, could drive the DAX toward 21,000. Conversely, cautious central bank forward guidance or unconvincing stimulus efforts may drag the DAX below 20,000.

Investors should also closely monitor US tariff-related news, which could overshadow sentiment towards central banks and other policy measures.

As of Friday morning, futures painted a mixed picture. DAX futures were down 36 points, while the Nasdaq-mini futures gained 85 points.

DAX Technical Indicators

Daily Chart

After Thursday’s gain, the DAX remains well above the 50-day and 200-day EMAs, sending bullish price signals.

If the DAX returns to Monday’s record high of 20,462, it could enable the bulls to target 21,750 next. Furthermore, a break above 20,750 may signal a move toward the 21,000 level.

Stimulus-related updates from Beijing, German trade data, central bank chatter, and US tariff-related news will influence DAX trends.

Conversely, a DAX drop below 20,350 could signal a fall toward 20,000. A return to 20,000 may bring the 19,675 support level into play.

The DAX remains in overbought territory, with the 14-day RSI at 72.65 (above 70). Selling pressure may intensify at Monday’s all-time high of 20,462.

Final Thoughts

The DAX remains sensitive to global economic developments, including German trade data, US tariff risks, and stimulus-related news from Beijing. Investors should prepare for potential volatility as markets react to these drivers.

Explore in-depth forecasts and actionable strategies here for navigating DAX volatility.