Dax Index News: German Wholesale Prices Could Steer DAX Toward 19,500 – Analysis

DAX Rebounds on Fed Rate Cut Bets and Earnings

On Thursday, November 14, the DAX rallied 1.37%, reversing a 0.16% loss from the previous session, closing at 19,264. Significantly, the DAX avoided a drop below 19,000 as investors shifted focus away from Trump’s tariff threats.

Corporate earnings and central bank rate cut expectations drove demand for DAX-listed stocks.

Major Stock Movers: Earnings Boost and Auto Sector Recovery

Siemens AG and Deutsche Telekom AG were among the leading stocks, rallying 4.91% and 3.30%, respectively. Investors reacted to earnings results that beat market expectations.

Auto stocks found much-needed support on rising expectations of an ECB rate cut. BMW and Mercedes Benz Group advanced by 2.55% and 2.11%, respectively. Porsche and Volkswagen also made strong gains.

Eurozone Economic Data Point to Steadying Economy

On Thursday, Eurozone GDP and labor market data signaled a potential steadying in the bloc’s economy. The economy expanded by 0.4% quarter-on-quarter in Q3 2024, up from 0.2% in Q2 2024. Furthermore, employment rose at the same pace as in the second quarter, easing concerns over an immediate deterioration in labor market conditions.

Despite the pickup in economic momentum, ECB policymakers continued supporting a December rate cut, driving the DAX higher.

German Wholesale Prices in Focus Amid December Rate Cut Hopes

On Friday, November 15, Germany’s wholesale price trends may further influence bets on a 50-basis point December ECB rate cut. Economists expect wholesale prices to fall 0.9% year-on-year in October after declining by 1.6% in September.

A less marked decline in wholesale prices could signal improving demand and potentially higher inflation. However, the continued fall in wholesale prices is a deflationary signal and is unlikely to shift the ECB into a hold rate stance.

Support for a 50-basis point December ECB rate cut could push the DAX through 19,350 to target 19,500. Conversely, hotter-than-expected wholesale prices may drag the DAX toward 18,750.

Expert Views on the German Economy and ECB Rate Path

ECB Vice President Luis de Guindos remarked on the ECB monetary policy outlook on Thursday, saying,

“There’s good news with inflation and not so good news on economic growth. We expect services inflation to slow down in the coming months. Our expectation of inflation evolution is that it will converge in a clear and stable manner towards price stability, 2%.”

Significantly, the positive outlook on inflation and economic jitters could fuel speculation about a 50 basis point December ECB rate cut.

US Data Influences December Fed Rate Cut Expectations

On Thursday, US producer prices increased by 2.4% year-on-year in October, up from 1.9% in September.

US labor market data also tested bets on a Fed rate cut while bolstering expectations for a soft US economic landing. Initial jobless claims dropped from 221k (week ending November 2) to 217k (week ending November 9).

The DAX reacted to the data, easing back from its session high. Rising producer prices and tighter labor market conditions tempered investor bets on a December Fed rate cut. According to the CME FedWatch Tool, the probability of a 25-basis point December Fed rate cut fell from 82.5% on November 13 to 62.1% on November 14.

US Equity Markets Retreat on Fed Rate Cut Expectations

On Thursday, US equity markets posted losses amid falling bets on a December Fed rate cut. The Dow and the S&P 500 dropped by 0.47% and 0.60%, respectively, while the Nasdaq Composite Index fell 0.64%. Tesla Inc. (TSLA) was among the worst performers, sliding 5.77%.

Late in the US session, Fed Chair Powell highlighted the need to tread carefully on policy until it has greater certainty, impacting demand for riskier assets.

US Retail Sales, a Soft Landing, and the Fed Rate Path

On Friday, US retail sales could influence sentiment toward a soft US economic landing and a December Fed rate cut. Economists forecast retail sales will increase by 0.3% month-on-month in October, down slightly from 0.4% in September.

A larger-than-expected increase in retail sales could signal higher inflation, potentially dampening Fed rate cut bets. A more hawkish Fed rate path may pull the DAX toward 18,750. Conversely, an unexpected fall in sales could refuel December rate cut expectations, supporting a DAX return to 19,350.

Other US economic indicators include the NY Empire State Manufacturing Index and industrial production data. However, absent a slump in production or manufacturing sector activity, retail sales will likely be the key driver.

Near-Term Outlook

In the near term, DAX trends will depend on German and US data, central bank commentary, and US tariff-related news. Upbeat US retail sales and tariff chatter could send the DAX toward 18,750. However, increasing support for December ECB and Fed rate cuts may ease near-term tariff jitters.

As of Friday morning, futures signaled a testy opening. DAX futures declined by 46 points, while the Nasdaq mini futures were down 91 points.

Investors should closely track US economic indicators, trade updates, and central bank commentary for market cues.

DAX Technical Indicators

Daily Chart

After Thursday’s rebound, the DAX sits above the 50-day and 200-day EMAs, sending bullish price signals.

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

German and US economic data, central bank commentary, and Trump policies require consideration.

Conversely, a DAX fall through Wednesday’s 18,839 low could bring 18,750 into play, with a potential slide toward 18,500.

With the 14-day RSI at 50.89, the DAX could climb to its all-time high before entering overbought territory.