Dax Index News: US Economic Data and ECB Rate Path in Focus – DAX Outlook Today

Market Overview

On Thursday, September 26, the DAX rallied 1.69%, reversing a 0.41% loss from the previous session, closing at 19,238. Investors reacted to stimulus measures from China, sending the DAX to a new all-time high.

Auto Stocks Surge on Chinese Stimulus

Auto stocks were among the best performers as stimulus measures from Beijing boosted demand for DAX-listed stocks. BMW and Mercedes-Benz Group saw gains of 3.81% and 3.27%, respectively, while Daimler Truck Holding advanced by 2.97%.

Additionally, Commerzbank jumped by 6.93% after the bank affirmed its strategy up to 2027 and targeted payout ratios of above 90% from 2025 – 2027.

China’s Politburo Considers Major Bank Capital Injection

On Thursday, FICC Investor CN Wire shared the news of China’s Politburo considering a $142 billion capital injection for banks. The capital injection would ease credit conditions, enabling banks to increase lending. Increased economic activity could boost demand for goods and services, possibly benefiting German companies.

German Consumer Sentiment in Focus

On Thursday, September 26, the GfK Consumer Climate Index increased slightly from -21.9 for September to -21.2 for October. Despite the modest improvement, concerns about the labor market and the economy pushed the Willingness to Save Indicator higher. The Indicators supported bets on a Q4 2024 ECB rate cut.

Expert Views on the ECB Rate Path

Pictet Wealth Management Head of Macroeconomic Research Frederik Ducrozet shared his views on the ECB rate path, stating,

“Markets now pricing in 15bp for the 17 October meeting. With only three weeks to go the ECB may not have enough data points to tip the balance. September HICP (due 1 October) is likely to see headline inflation drop below 2% but services inflation still close to 4%.”

German Unemployment Under Scrutiny

On Friday, September 27, Germany’s unemployment figures for September will require consideration. Economists expect the unemployment rate to hold steady at 6.0% in September, despite an anticipated 12k rise in unemployment.

An unexpected rise in the unemployment rate could raise investor expectations of an October ECB rate cut.

ECB Monetary Policy in Focus

Amidst increasing speculation about a Q4 ECB interest rate cut, traders should monitor ECB commentary. ECB Chief Economist Philip Lane is on the calendar to speak. Insights into the outlook for inflation and the timing of an ECB rate cut could impact demand for DAX-listed stocks. ECB support for an October rate cut may push the DAX to a new all-time high.

US Initial Jobless Claims

On Thursday, US initial jobless claims fueled bets on a soft US economic landing, driving demand for DAX-listed stocks. Initial jobless claims dropped from 222k (week ending September 14) to 218k (week ending September 21). Tighter labor market conditions could support wage growth and consumer spending, which accounts for over 60% of the US economy. Expectations of a soft US landing drove demand for riskier assets.

Other stats included durable goods orders and finalized Q2 2024 GDP data.

US Market Trends

On Thursday, September 26, the US equity markets trended higher on upbeat US economic data. The Dow and the Nasdaq Composite Index saw gains of 0.62% and 0.60%, respectively, while the S&P 500 advanced by 0.40%.

Key US Economic Data in Focus

On Friday, September 27, the US Personal Income and Outlays Report will influence the Fed rate path and market risk sentiment.

Economists forecast the US Core PCE Price Index to increase by 2.7% year-on-year in August, up from 2.6% in July. An uptick in inflation could temper bets on a 50-basis point November Fed rate cut. However, investors should also consider personal income and spending trends. Weaker personal income and spending trends could signal a softer inflation outlook, supporting a more dovish Fed rate path.

Other stats include finalized consumer sentiment figures. However, these will likely play second fiddle to the Personal Income and Outlays Report.

Near-Term Outlook

Near-term DAX trends will hinge on Germany’s unemployment rate, the US Personal Income and Outlays Report, and central bank commentary. Signals of a soft US economic landing, combined with increased speculation of multiple Q4 2024 Fed rate cuts, may push the DAX to a new all-time high. Conversely, fears of a hard US landing could send the DAX toward 18,750.

The futures markets signal a mixed start to the Friday session, with the DAX up by 49 points while the Nasdaq mini was down by 20 points. Further policy measures from China could set the tone for the Friday European session.

Investors should stay alert to central bank chatter and economic indicators. 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, affirming bullish price signals.

A return to the September 26 all-time high of 19,253 could support a move toward 19,500. Furthermore, a break above 19,500 could bring the 20,000 level into view.

Investors should focus on German unemployment numbers, central bank commentary, and the US Personal Income and Outlays Report, which may influence near-term market sentiment.

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

The 14-day RSI at 64.96 suggests a move to 19,500 before entering overbought territory.