Dax Index News: German Inflation and US CPI Take Center Stage in Volatile Outlook

DAX Ends Seven-Day Winning Streak: Can Inflation Reignite Demand?

On Monday, December 9, the DAX dropped by 0.19%, reversing Friday’s 0.13% gain, closing at 20,346. Despite striking a record high of 20,462 earlier in the session, the index reversed course, breaking its seven-day winning streak.

Fresh policy measures from Beijing initially drove the DAX to a record high. However, the US equity markets weighed on the DAX late in the day as the focus shifted to US inflation and the Fed rate path.

Sector Highlights: Autos and Tech Shine

Auto stocks posted strong gains for a second consecutive session on Monday. Mercedes Benz Group rallied 3.24%, while BMW gained 2.54%. Porsche and Volkswagen also closed the session with solid gains. China’s Politburo announced plans to implement stimulus targeting consumption and broad-based demand, boosting investor appetite for auto stocks.

Tech stocks also advanced, with Infineon Technologies rising 2.23%.

However, Rheinmetall AG tumbled 5.95%. News of US President-elect Trump meeting with French President Macron and Ukrainian President Zelensky raised hope of the Ukraine war ending, weighing on defense sector stocks.

China Trade Data Highlights Economic Challenges

On Tuesday, China’s trade data painted a gloomy picture of China’s economy. Exports increased by 6.7% year-on-year in November, down from 12.7% in October. Export trends signaled weaker overseas demand for Chinese goods. Meanwhile, imports fell more sharply, underscoring weak domestic demand highlighted by Monday’s inflation data.

Beijing’s pledge to introduce fresh stimulus measures and loosen monetary policy cushioned the impact of the weak trade data on the Hang Seng Index and Mainland China equity markets.

The import slump could weigh on DAX-listed companies with significant exposure to China.

German Inflation and the ECB in Focus

On Tuesday, December 10, Germany’s finalized inflation figures for November drew investor interest. The annual inflation rate increased from 2.0% in October to 2.2% in November, unchanged from the preliminary figures.

According to Destatis,

• Service sector inflation continued to drive headline inflation.
• Prices for services were 4.0% higher year-on-year in November.
• However, energy prices softened, countering inflationary pressures from services.
• Prices for energy products fell 3.7% year-on-year in November, with fuel prices down 6.6%.

Rising inflation could temper investor bets on multiple ECB rate cuts, potentially weighing on demand for DAX-listed stocks.

US Consumer Inflation and Rate Expectations

Meanwhile, in the US, the New York Fed’s Survey of Consumer Expectations signaled a pickup in consumer optimism:

• US inflation expectations increased from 2.9% in October to 3.0% in November.
• Consumer sentiment toward their financial situation in one year rose to its highest since February 2020.
• The mean probability of unemployment being higher in one year edged 0.5 percentage points higher to 35.0%.

However, November’s figures failed to temper Fed rate cut bets. According to the CME FedWatch Tool, the chances of a December cut rose from 86.0% on December 6 to 89.5% on December 9.

US Markets Decline Amid Caution Ahead of CPI Report

On Monday, US equity markets trended lower, with the Nasdaq Composite Index and the S&P 500 declining by 0.62% and 0.61%, respectively. The Dow extended its losing streak to three sessions, falling 0.54%.

Reports of China launching an antitrust investigation into Nvidia (NVDA) over possible monopolistic practices left the tech sector in negative territory. NVDA slid by 2.55%.

Investor caution ahead of Wednesday’s US CPI Report also weighed on riskier assets.

Near-Term Outlook

In the near term, DAX trends hinge on China’s stimulus-related updates, the US CPI Report, and central bank communications. Silence on US tariff threats and rising expectations for Fed and ECB rate cuts may push the index toward 21,000.

Conversely, higher-than-expected US inflation or hawkish central bank outlooks may drag the index below 20,000.

Risks linger, including potential US tariffs on EU goods, which could hurt demand for German goods. Weaker US demand and rising competition from China may pressure corporate earnings and stock prices.

As of Tuesday morning, futures signaled a choppy session ahead. DAX futures dropped by 72 points, while the Nasdaq mini futures declined by 14 points.

China’s trade data will likely set the tone for the Tuesday European session. Details of Beijing’s stimulus plans will be crucial for riskier assets.

Investors should monitor economic data, central bank commentary, and tariff-related news for trading opportunities.

DAX Technical Indicators

Daily Chart

Despite Monday’s retreat, the DAX sits comfortably above the 50-day and 200-day EMAs, confirming bullish price trends.

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

China trade data, German inflation, central bank commentary, and US tariff-related updates will influence DAX trends.

Conversely, a DAX drop below 20,150 could enable the bears to target 20,000. A fall through 20,000 may bring the 19,675 support level into play.

The DAX remains in overbought territory, with the 14-day RSI at 71.64 (> 70). Selling pressure could intensify at Monday’s all-time high of 20,462.

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