Dax Index News: German Inflation Looms Large Over DAX Forecast Today

DAX Holds Above 19,000 Amid Persistent Headwinds

On Wednesday, November 27, the DAX slipped by 0.18%, following a 0.56% loss on Tuesday, closing at 19,262.

A deteriorating German economy and ongoing US tariff threats weighed on market sentiment.

How can tariffs affect the DAX?

Punitive tariffs on German goods may impact demand, potentially weighing on earnings.

German Retail and Tech Sectors Struggle

Risk-off sentiment impacted demand for tech stocks, with Infineon Technologies and SAP falling 1.41% and 1.37%, respectively.

Retail-linked stocks also struggled on weaker consumer sentiment, potentially dampening private consumption. Online retailer Zalando slid by 2.05%, while Adidas declined by 0.72%.

German Consumer Confidence Slumps

On Wednesday, November 27, Germany’s GfK Consumer Sentiment Indicator signaled more trouble for the German economy.

The Indicator slid from -18.4 for November to -23.3 for December. Concerns about rising unemployment and a slump in income expectations suggested a pullback in consumer spending. Accounting for over 50% of Germany’s GDP, weaker private consumption could further hinder an economic recovery.

German Inflation Crucial for the ECB Rate Path

German inflation figures will garner investor interest on Thursday, November 28. Economists expect the annual inflation rate to increase from 2.0% in October to 2.3% in November. An inflation rate above the ECB’s 2% target could dampen bets on a 50-basis point December ECB rate cut.

A less dovish ECB rate path may drag the DAX below 19,000. Conversely, softer inflation may fuel speculation about a 50-basis point ECB rate cut, potentially driving the DAX toward 19,500.

ECB Policymaker Isabel Schnabel Pours Cold Water an ECB Rate Cut

On Wednesday, ECB Executive Board Member Isabel Schnabel spooked investors, suggesting a limited scope for further rate cuts.

Schnabel stated that she would be hesitant to respond strongly to economic weakness caused by structural factors. Falling bets on aggressive ECB rate cuts to bolster the Euro area economy could weigh on rate-sensitive DAX-listed stocks. Elevated borrowing costs may affect corporate profits and stock prices of capital-intensive companies, including tech.

Pictet Wealth Management Head of Macroeconomic Research Frederik Ducrozet reacted to Schnabel’s comments, saying,

“That’s a bold statement from Isabel Schnabel, one that several ECB Governing Council members are likely to disagree with imo. Also, would a trade war with the US qualify as ‘structural weakness’?”

US Data Adds to Market Volatility

In the US, the Core PCE Price Index increased by 2.8% year-on-year in October, up from 2.7% in September. Higher inflation underscored the sticky inflation environment, potentially lowering the chances of a December Fed rate cut.

Personal income and spending figures beat expectations, indicating further inflationary pressures.

Labor market data reinforced expectations for a resilient inflation environment. US initial jobless claims remained steady at 213k (week ending November 23). Notably, initial jobless claims remained at their lowest level since May 2024.

US Equity Markets Retreat on Fed Rate Cut Uncertainty

On Wednesday, November 27, US equity markets closed the session in negative territory. The Dow ended a five-day winning streak, falling 0.31%, while the Nasdaq Composite Index and the S&P 500 dropped by 0.60% and 0.38%, respectively.

US inflation figures fueled uncertainty about a potential December Fed rate cut. The higher inflation rate led to profit-taking ahead of the Thanksgiving holidays.

Near-Term Outlook

In the near term, DAX movements will hinge on German inflation, central bank commentary, and US Tariff developments. Higher German inflation, a less dovish ECB rate path, and tariff threats may pull the DAX below 19,000. Conversely, softer inflation and support for a 50-basis point December ECB rate cut may counter tariff fears, potentially driving the DAX toward 19,500.

As of Thursday morning, futures signaled a positive session. DAX futures were up by 73 points, while the Nasdaq mini futures advanced by 45 points.

Investors should monitor Eurozone economic data, central bank remarks, and tariff-related updates for trading opportunities.

DAX Technical Indicators

Daily Chart

Despite Wednesday’s loss, the DAX sits above the 50-day and 200-day EMAs, affirming bullish price signals.

A DAX return to 19,350 could signal a move toward 19,500. Furthermore, a breakout from 19,500 may enable the bulls to target an all-time high of 19,675.

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

Conversely, a DAX drop below the 50-day EMA could signal a fall through 19,000. A fall below 19,000 may bring 18,750 into play.

With the 14-day RSI at 51.11, the DAX may rise to the 19,675 all-time high before entering overbought territory.