Dax Index News: Inflation Data to Drive Forecast Amid Rising Tariff Concerns

DAX Slips Amid Inflation Fears and US Tariff Concerns

On Monday, November 18, the DAX slipped by 0.11%, following a 0.27% loss on Friday, closing at 19,189.

Investors turned cautious as the focus shifted to Euro area inflation and private sector PMIs due this week.

Real Estate and Tech Stocks Drag Market Lower

Vonovia slid by 2.67% amidst a broad-based real estate sector pullback, while tech stocks declined ahead of NVIDIA’s (NVDA) earnings. Infineon Technologies ended the session down 1.82%, reflecting market caution.

Auto stocks had a mixed session as investors considered potential US tariffs on EU goods. Porsche declined by 0.98%, while Volkswagen slipped by 0.05%. In contrast, BMW advanced by 1.18%.

Eurozone Trade Surplus Widens, Imports Fall

The Eurozone trade surplus widened from €4.1 billion in August to €12.5 billion in September. Exports increased by 0.6% year-on-year in September, with vehicle exports contributing to the higher surplus.

However, imports declined by 0.6%, signaling weaker demand ahead of potential US tariffs, impacting demand for DAX-listed stocks.

Eurozone Inflation in Focus

On Tuesday, November 19, finalized Eurozone inflation figures will draw interest. According to the preliminary report, the annual inflation rate rose from 1.7% in September to 2.0% in October. An upward revision would take inflation above the ECB’s 2% target, potentially reducing bets on a 50-basis point December ECB rate cut. A less dovish ECB rate path may drag the DAX toward 19,000.

The preliminary inflation report contributed to a 0.93% DAX loss on October 31.

Expert Views on Euro Area Trade and US Tariffs

On Monday, Daniel Kral, European macro specialist at Oxford Economics, commented on EU countries that are most exposed to US tariffs, stating,

“In the European Union, Ireland, Belgium, and the Netherlands have the largest direct exposure to the US. But this is distorted by Ireland’s contract manufacturing and large Dutch and Belgian ports handling most of EU trade. Also, their large pharma surpluses are rarely mentioned. This leaves Germany, Finland, Sweden, and Italy and auto-heavy CEE economies most at risk.”

US Data Clouds the Picture for the Fed

In the US, the NAHB Housing Market Index increased from 43 in October to 46 in November. Improving market conditions could boost consumer confidence and spending, potentially fueling demand-driven inflation.

According to the CME FedWatch Tool, the chances of a December Fed rate cut fell from 61.9% on November 15 to 58.4% on November 18.

However, falling 10-year US Treasury yields limited the impact of the housing sector data on the DAX.

US Equity Markets See Mixed Start to the Week

On Monday, November 18, US equity markets had a mixed start to the week. The Nasdaq Composite Index gained 0.60%, breaking a four-day losing streak, while the S&P 500 rose by 0.39%. The Dow bucked the trend, declining by 0.13%.

Super Micro Computer (SMCI) led the gains on the Nasdaq, surging 16%, while Tesla (TSLA) rallied 5.62% on bets that the Trump administration may loosen self-driving rules.

US Housing Sector Data Remains in Focus

On Tuesday, US housing sector data will remain in focus. Economists expect housing starts to fall by 0.2% in October while forecasting building permits to rise by 2.5%.

Better-than-expected housing sector data could further dampen investor bets on a December Fed rate cut, potentially weighing on the DAX.

However, investors should also consider FOMC member commentary. Calls to delay Fed rate cuts could affect buyer demand for rate-sensitive DAX-listed stocks.

Near-Term Outlook

In the near term, DAX trends will hinge on the Euro area economic indicators, central bank commentary, and US tariff-related news. Hotter-than-expected Euro area inflation and hawkish central bank rhetoric may pull the DAX toward 19,000. Conversely, softer inflation and dovish Fed commentary could offset US tariff fears, supporting a DAX move toward 19,350.

As of Tuesday morning, futures signaled a positive opening. DAX futures gained 67 points, while the Nasdaq mini futures were up 56 points.

Investors should closely track the Euro area economic indicators, tariff-related updates, and central bank commentary for market cues.

DAX Technical Indicators

Daily Chart

Despite two days in the red, the DAX hovers above the 50-day and 200-day EMAs, confirming bullish price trends.

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

Euro area inflation, central bank commentary, and Trump’s administration picks require consideration.

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

With the 14-day RSI at 49.10, the DAX may fall below 18,750 before entering oversold territory.