Dax Index News: Fed and ECB Rate Cuts Could Push DAX to New Highs – Forecast Today

DAX Ends the Week on a High Note

On Friday, October 11, the DAX gained 0.85%, reversing a 0.23% loss from the previous session, closing at 19,374.

Investor hopes for ECB and Fed interest rate cuts and further fiscal stimulus measures from China drove demand for DAX-listed stocks.

Auto Stocks Limit Broader Gains

Airbus Group and Siemens Energy AG rallied 3.93% and 3.29%, respectively, on sentiment toward ECB and Fed rate paths. Tech stocks, including SAP and Infineon technologies, also trended higher.

However, auto stocks had a mixed session. BMW slid by 1.12%, while Volkswagen declined by 0.52%. Moody’s cut Volkswagen’s outlook from stable to negative, affecting its share price.

German Inflation Boosts ECB Rate Cut Bets

Germany’s annual inflation rate fell from 1.9% in August to 1.6% in September, fueling expectations of a 25-basis point October ECB rate cut. ECB rate cuts would reduce borrowing costs, potentially improving company profits and supporting higher share prices.

Experts Weigh in on ECB Rate Cut Expectations

Bloomberg Global Economist Nick Hallmark remarked on Germany’s inflation trends, stating,

“Since the Governing Council’s last meeting, members have been taking on an even more dovish tone as concerns of inflation undershooting target has increased.”

ECB Monetary Policy in Focus

On Monday, October 14, investors should track ECB policymaker speeches as the ECB’s interest rate decision looms. Their views on inflation, the economic outlook, and the ECB rate path could influence demand for DAX-listed stocks.

Support for multiple Q4 2024 ECB rate cuts could drive the DAX toward 19,500. Conversely, calls for patience in easing monetary policy in December may push the DAX toward 19,000.

US Producer Prices Signal Softer Consumer Prices

On Friday, US producer prices stagnated in September after rising by 0.2% in August. Producers lower their prices if demand weakens, possibly signaling softer consumer prices. Consumers could delay purchase plans if they expect prices to fall, dampening inflationary pressures.

Other stats also bolstered bets on multiple Q4 2024 Fed rate cuts, with the Michigan Consumer Sentiment Index falling from 70.1 in September to 68.9 in October. Weaker consumer sentiment may signal a pullback in private consumption, potentially dampening inflation.

US Market Trends

On Friday, the US Equity Markets reversed Thursday’s losses. The Dow advanced by 0.97%, while the Nasdaq Composite Index and the S&P 500 saw gains of 0.33% and 0.61%, respectively. US banks kicked off the earnings season, with JP Morgan (JPM) and Wells Fargo (WFC) beating forecasts.

Fed Speakers and the Fed Rate Path in Focus

On Monday, investors should monitor FOMC member speeches. Insights into the US labor market, inflation, and the Fed rate path could influence buyer demand for DAX-listed stocks. Support for multiple Q4 2024 Fed rate cuts may send the DAX toward 19,500. Conversely, the DAX could fall toward 19,000 if Fed speakers call for a delay in interest rate cuts.

Near-Term Outlook

In the short term, DAX trends will likely hinge on Euro area inflation figures and the ECB interest rate decision. Softer-than-expected inflation numbers and a dovish ECB could boost demand for the DAX. Conversely, calls to hold interest rates in December may pressure the DAX lower.

Additionally, investors should also consider FOMC member commentary, US retail sales, and initial jobless claims for further direction.

On Monday, the DAX futures signaled a mixed opening, with the DAX up 7 points, while the Nasdaq mini was down by 39 points.

Investors should also track updates on the Middle East conflict. An escalation in the Middle East conflict could trigger a flight to safety, possibly sending the DAX below 19,000. Stay informed with our latest news and analysis to manage your risks effectively.

DAX Technical Indicators

Daily Chart

The DAX sits comfortably above the 50-day and 200-day EMAs, confirming bullish price trends.

A breakout from October 11’s high of 19,377 could support a move toward the all-time high of 19,492. Furthermore, a break above 19,492 may give the bulls a run at 19,750.

Investors should consider updates from the Middle East, China stimulus news, and central bank commentary, which may influence near-term market sentiment.

Conversely, a fall through 19,000 could give the bears a run at the 50-day EMA.

The 14-day RSI at 62.35 indicates a climb to 19,500 before entering overbought territory.