Dax Index News: US Retail Sales, Fed Rate Path Key to DAX Price Trends Today

Market Overview

On Monday, September 16, the DAX declined by 0.35%, partially reversing a 0.98% gain from the previous day to close at 18,633.

Key DAX Market Movers

Infineon Technologies led the way, sliding by 2.62%, while SAP fell by 0.25% amid Fed policy uncertainty.

Auto stocks also weighed on the DAX, with Volkswagen and BMW ending the day with losses of 1.41% and 1.09%, respectively.

Eurozone Trade Data Beat Expectations

On Monday, the Eurozone trade surplus narrowed marginally from €21.7 billion in June to €21.2 billion in July. However, considering trends from July 2023, exports were up 10.2% year-on-year in July, with imports 4.0% higher. While the trade surplus fell slightly in July, the trade surplus was significantly higher compared with July 2023, suggesting an improved demand environment.

ECB Sent Mixed Signals

Despite the steady trade numbers for the Eurozone, ECB commentary affected demand for DAX-listed stocks.

ECB Chief Economist Philip Lane called for gradual rate cuts on Monday. However, ECB Governing Council member Peter Kazimir warned against easing too quickly, highlighting policy uncertainty. Kazimir stated,

“We will almost surely need to wait until December for a clearer picture before making our next move.”

German ZEW Economic Sentiment in Focus

Turning to the Tuesday, September 17, session, ZEW Economic Sentiment figures from Germany will draw investor interest.

Economists forecast the Index to fall from 19.2 in August to 17.1 in September. Weaker-than-expected numbers could increase concerns about the German economy. Notably, a sharp deterioration in sentiment toward the German economy could pressure the ECB to adjust its rate path to support the broader Eurozone economy.

NY Empire State Manufacturing Index Rebounds

On Monday, the NY Empire State Manufacturing Index jumped from -4.70 in August to +11.5 in September. Despite the numbers boosting demand for riskier assets, uncertainty about the Fed rate path lingered.

According to the CME FedWatch Tool, the probability of a 50-basis point Fed rate cut increased from 50.0% on September 13 to 69.0% on September 16. More aggressive Fed rate cuts to prevent a hard US economic landing could spook investors. Uncertainty toward Wednesday’s interest rate decision and forward guidance impacted demand for DAX-listed stock.

US Market Trends

On Monday, September 16, the US equity markets had a mixed session. The Dow and the S&P 500 advanced by 0.55% and 0.13%, respectively, while the Nasdaq Composite Index fell by 0.52%.

US Retail Sales to Influence the Fed Rate Path

On Tuesday, US retail sales will likely influence sentiment toward the Fed rate path. Economists expect retail sales to increase by 0.2% in August, down from a 1.0% rise in July. Better-than-expected figures could ease fears of a hard landing as private consumption accounts for over 60% of the US economy. Upbeat figures could push the DAX toward 18,750.

Conversely, an unexpected fall in retail sales could retrigger fears of a hard US landing and cement bets on a 50-basis point Fed rate cut, possibly fueling a flight to safety. A flight to safety could push the DAX down below 18,500.

Near-Term Outlook

Near-term DAX trends will depend on the US retail sales figures and Wednesday’s Fed interest rate decision. Weaker-than-expected US retail sales and a 50-basis point Fed rate cut could pull the DAX down toward 18,000. Conversely, upbeat retail sales and optimism that the US could avoid a hard landing could push the DAX toward 19,000.

In the futures markets, the DAX was up 62 points, while the Nasdaq mini was down by 15 points. Investor hopes for stimulus measures to bolster the Chinese economy likely supported the DAX futures.

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 hovers above the 50-day and 200-day EMAs, confirming bullish price trends.

A break above 18,750 could give the bulls a run at the all-time high of 18,991. Furthermore, a return to 18,991 may signal a move toward 19,200.

Central bank commentary and US retail sales require investor consideration.

Conversely, a fall through 18,500 could give the bears a run at the 50-day EMA. A break below the 50-day EMA would bring 18,000 into view.

The 14-day RSI at 55.20 suggests a return to the all-time high before entering overbought territory.