Dax Index News: ECB Commentary, Trade Data to Fuel DAX Price Action

DAX Slips as Fed Rate Cut Bets Fade

On Friday, November 15, the DAX dropped by 0.27%, partially reversing a 1.37% gain from Thursday, closing at 19,211. Falling bets on a December Fed rate cut and the ongoing threat of US tariffs on EU and Chinese goods put pressure on the DAX.

Major Stock Movers: Pharma and Tech Stocks Lead Losses

Sartorius AG tumbled 6%, while Qiagen and Merck declined by 2.49% and 2.22%, respectively. Pharma-related stocks dropped as investors reacted to Trump picking Robert F. Kennedy Jr. to head of the Department of Health and Human Services. RFK Jr. holds a critical stance on vaccines and Big Pharma.

Infineon Technologies and SAP ended the session down 1.56% and 1.70%, respectively. US-listed Applied Materials (AMAT) slid by 9.16% on disappointing earnings, impacting the tech sector.

China Economic Data Send Mixed Signals

Before the European opening bell, economic indicators from China set the tone. Notably, retail sales and unemployment signaled improving domestic consumption, supporting a positive start to Friday’s session.

However, weaker-than-expected industrial production highlighted the weak demand backdrop, dampening optimism.

German Wholesale Prices Continue to Fall

German wholesale prices dropped by 0.8% year-on-year in October, less steep than September’s 1.6% drop. The better-than-expected numbers could temper bets on a 50-basis point December ECB rate cut as the ECB assesses potential inflationary impacts of US trade policies.

Eurozone Trade Under the Spotlight

On Monday, November 18, Eurozone trade data could influence DAX trends. Economists forecast the trade surplus to widen from €4.6 billion in August to €7.8 billion in September.

Rising imports and exports, supporting a wider trade surplus, would signal improving demand, potentially driving the DAX toward 19,350. However, DAX may see gains limited as investors grapple with the threat of US tariffs on imports from the EU and China.

Conversely, reduced imports and exports could indicate waning demand and pull the DAX toward 19,000.

ECB Vice President and Chief Economist in Focus

Turning to the ECB, ECB Vice President Luis de Guindos and Chief Economist Philip Lane and their views on a December ECB rate cut could affect demand for DAX-listed stocks.

Support for aggressive rate cuts might bolster the DAX, while caution over Trump’s policies may weigh on investor confidence.

US Retail Sales Dampen Fed Rate Cut Expectations

In the US, retail sales increased by 2.8% year-on-year in October, up from 2.0% in September. Rising retail sales may fuel demand-driven inflation, reducing expectations for a December Fed rate cut.

Friday’s data followed Fed Chair Powell’s call for caution against further policy moves without greater economic clarity.

A higher-for-longer Fed rate path may expose firms to higher borrowing costs, affecting profitability and share prices.

US Equity Markets Drop as Fed Rate Cut Bets Soften

On Friday, US equity markets extended their losses from Thursday as investors lowered bets on a December Fed rate cut. The Nasdaq Composite Index slid by 2.24%, while the Dow and the S&P 500 declined by 0.70% and 1.32%, respectively.

Amazon.com (AMZN) ended the session down 4.22%.

US Housing Sector and Fed Chatter in Focus

On Monday, US housing sector data could influence market risk sentiment as economists consider the sector a barometer of the US economy.

Economists forecast the NAHB Housing Market Index to increase from 43 in October to 44 in November. A larger-than-expected increase could further reduce bets on a December Fed rate cut, supporting a DAX fall toward 19,000. However, softer numbers may drive the DAX toward 19,350.

In addition to the data, FOMC member Austan Goolsbee will speak. Support to maintain the interest rate at 4.75% until 2025 would likely test demand for DAX-listed stocks.

Near-Term Outlook

In the near term, DAX trends will hinge on economic indicators, central bank commentary, and US tariff-related chatter. Upbeat US data and hawkish Fed commentary could drag the DAX toward 19,000. However, increasing support for December ECB and Fed rate cuts could counter US tariff jitters, potentially driving the DAX toward 19,350.

As of Monday morning, futures signaled a positive opening. DAX futures advanced by 52 points, while the Nasdaq mini futures were up 133 points.

Investors should closely track the economic indicators, tariff-related updates, and central bank commentary for market cues.

DAX Technical Indicators

Daily Chart

Despite Friday’s pullback, the DAX remains above the 50-day and 200-day EMAs, affirming bullish price signals.

A DAX break above 19,350 could support a return to 19,500. Furthermore, a breakout from 19,500 may bring the DAX’s all-time high of 19,675 into play.

Euro area and US economic data, central bank commentary, and Trump’s administration picks require consideration.

Conversely, a DAX break below the 50-day EMA could signal a drop to 19,000. A fall through 19,000 may enable the bears to target 18,750.

With the 14-day RSI at 49.63, the DAX could drop below 18,750 before entering oversold territory.