Dax Index News: Economic Outlook Brightens on ZEW Sentiment Forecast, Market Gains

DAX Opens Higher Amid Ukraine War Developments

The DAX Index opened higher on Tuesday, February 18, rising 0.20% to 22,844 as investors assessed geopolitical and economic developments.

Sector Performance: Defense, Aerospace, and Autos Gain Momentum

ThyssenKrupp AG (+3.03%), Rheinmetall AG (+1.22%), and MTU Aero Engines AG (+0.79%) extended gains after Monday’s breakout.

Investor sentiment strengthened after the EU held an emergency summit on February 17 to discuss increased defense spending, Defense spending aims at countering potential Russian aggression if a US-brokered peace deal to end the Ukraine war materializes.

EU President Ursula von der Leyen underscored the need for higher European defense investment, stating:

“Today in Paris we affirmed that Ukraine deserves peace through strength. Peace respectful of its independence, sovereignty, territorial integrity, with strong security guarantees. Europe carries its full share of the military assistance to Ukraine. At the same time, we need a surge in defence in Europe.”

Meanwhile, auto stocks also trended higher. Mercedes-Benz Group gained 0.37%, while Volkswagen and Porsche advanced by 0.20% and 0.24%, respectively.

ZEW Economic Sentiment in Focus

Germany’s ZEW Economic Sentiment Index, set for release on February 18, is expected to rise to 15.5 in February, up from 10.3 in January. A sharp increase would signal growing optimism about Germany’s economic outlook.

February’s data may also reflect improved analyst sentiment on the US and the EU averting a trade war, potentially bolstering US demand for German exports.

However, despite an expected pickup in optimism, economic sentiment remains well below historical highs, underscoring ongoing concerns about Germany’s recovery and global demand trends.

US Markets Recap: Why it matters

On Monday, February 17, US futures advanced as investors assessed recent US economic data and its potential impact on Fed policy. The Dow Jones mini gained 108 points overnight, while the Nasdaq 100 mini and S&P 500 mini rose 39 and 14 points, respectively. US markets were closed for President’s Day.

How Will US Data Influence the DAX?

Key US economic releases on February 18 include the NY Empire State Manufacturing Index and the NAHB Housing Market Index. Upbeat data and a hawkish Fed stance could dampen global risk sentiment and weigh on the DAX.

Economists forecast the NY Empire State Manufacturing Index to rise from -12.6 in January to 0 in February. A rebound in manufacturing activity could indicate rising employment, fueling consumer spending and demand-driven inflation. A higher inflation outlook may delay Fed rate cuts.

Meanwhile, housing market data remains a key barometer of the US economic health. Economists expect the NAHB Housing Market Index to hold at 47 in February. A higher reading could signal confidence in the US economy and labor market, supporting consumer spending. However, a weaker-than-expected reading may signal a more dovish Fed rate path.

Stronger-than-expected US data could weigh on global risk sentiment, pressuring the DAX.

Near-Term Outlook

The DAX’s near-term trajectory hinges on Friday’s private sector PMI data.

• Increasing private sector activity, rising employment, and higher prices could reduce expectations for ECB and Fed rate cuts, which may pressure equities and pull the DAX toward 22,500.
• Weaker private sector activity and softer price pressures may support more accommodative monetary policies, pushing the DAX above 23,000.

Beyond the data, geopolitical risks and trade developments remain key drivers.

• An escalation in US-EU trade tensions could weigh on the DAX, while signs of de-escalation may drive the Index to record highs.
• Progress in Ukraine peace talks and increased EU defense spending could offset potential trade tariffs risks.

As of Tuesday morning, US futures pointed to a positive session, with the Nasdaq 100 mini rising 113 points.

DAX Technical Indicators

Daily Chart

After Monday’s rally, the DAX sits well above the 50-day and 200-day Exponential Moving Averages (EMAs), sending bullish price signals.

If the DAX surpasses this morning’s record high of 22,851, it could move toward 23,000. A break above 23,000 may bring 23,150 into sight.

Conversely, a DAX drop to 22,500 could allow the bears to target 22,150 next.

With the 14-day Relative Strength Index (RSI) at 80.16, the DAX remains in overbought territory (RSI higher than 70). Selling pressure may intensify if the DAX approaches the key resistance level of 22,851.

Final Thoughts

The DAX’s outlook will depend on upcoming private sector PMIs, central bank forward guidance, geopolitical risks, and tariff-related updates.

Stay ahead with our latest insights and real-time analysis here.