Dax Index News: Will US Jobs Data and Tariff Threats Sink the DAX?

DAX Slips Amid Demand Woes and Tariff Threats

Economic indicators from China and Germany fueled demand concerns amid ongoing threats of US tariffs on EU goods, weighing on market sentiment. These challenges continue to pressure the DAX, contributing to its uncertain near-term outlook.

On Thursday, January 9, the DAX slipped by 0.06%, following Wednesday’s 0.05% loss to close at 20,216.

Auto Stocks Drag the DAX Lower

The auto sector led the DAX drove the DAX lower. Porsche slid by 1.98% on Thursday, with BMW and Mercedes-Benz Group posting losses of 1.62% and 0.47%, respectively. German trade data and inflation figures from China signaled weakening demand, impacting buyer appetite.

Airbus Group and RWE AG also contributed to Thursday’s losses, declining by 2.49% and 1.32%, respectively. The aviation and auto sectors remain vulnerable to US tariff threats, raising concerns over earnings and valuations.

German Economic Data Sends Warning Signals

Industrial production jumped 1.5% in November after falling 0.4% in October. However, the rebound could be temporary following November’s 5.4% slump in factory orders.

Trade data also painted a gloomy demand outlook, with imports sliding by 3.3% in November. A 2.1% rise in exports also suggested a temporary boost in demand.

The grim outlook aligns with December’s Manufacturing PMI data, which revealed a marked drop in demand.

Daniel Kral, European Macro Specialist for Oxford Economics, commented on the industrial production data:

“German industry surprised to the upside in November, up by 1.3%. But this was likely driven by one-off factors like timing of school holidays, given strong structural headwinds and still downbeat leading indicators. Most likely another dead cat bounce (no shortage of those)…”

US Futures Markets Fall Ahead of US Jobs Report

On Friday, January 10, the US futures markets posted early losses amid investor caution ahead of the US Jobs Report. The Nasdaq 100 mini was down 57 points, while the Dow Jones mini and S&P 500 mini declined by 11 and 15 points, respectively. The US markets were closed on Thursday to honor former President Jimmy Carter.

10-year US Treasury yields hovered near their May 2024 highs, reflecting expectations of a more hawkish Fed rate path.

Meanwhile, the EUR/USD pair extended its losses from Thursday, falling 0.02% to $1.02966 on Friday, January 10. A weaker EUR may counter the effects of US tariffs on the competitiveness of German goods and company earnings.

US Jobs Report in Focus

On Friday, January 10, the US Jobs Report will take center stage. Economists forecast average hourly earnings to rise 4% year-on-year in December, mirroring November’s increase. Additionally, economists expect the US unemployment rate to remain at 4.2%.

Higher-than-expected wage growth and a lower unemployment rate could sink bets on an H1 2025 Fed rate cut. A more hawkish Fed rate path could pressure riskier assets. Higher borrowing costs may affect company earnings.

Conversely, softer wage growth and a higher unemployment rate could boost March Fed rate cut bets and demand for rate-sensitive DAX-listed stocks. 

Near-Term Outlook

The DAX’s near-term trends will depend on the US Jobs Report and central bank commentary. Hotter-than-expected US labor market indicators and hawkish central bank chatter could pull the DAX below 20,000. However, softer US data may drive the DAX toward its record high of 20,523.

Investors should also monitor stimulus news from China and US tariff developments. These are key factors influencing market sentiment. Fresh stimulus measures from Beijing, targeting consumption and demand, could improve the outlook for German export companies.

As of Friday morning, futures pointed to a cautious session. DAX futures were up 10 points.

DAX Technical Indicators

Daily Chart

Despite Thursday’s modest loss, the DAX sits well above the 50-day and 200-day Exponential Moving Averages (EMAs), affirming bullish price signals.

If the DAX breaks above 20,350, it could signal a move toward the record high of 20,523 next. A breakout from 20,523 may enable the bulls to target the 20,750 level.

US labor market data, tariff developments, and central bank commentary will influence DAX trends.

Conversely, a DAX break below 20,000 may signal a drop toward the 50-day EMA and the 19,675 support level.

With the 14-day RSI at 61.16, the DAX could return to 20,523 before entering overbought territory (RSI higher than 70).

Final Thoughts

Despite global uncertainties, a dovish ECB and a weaker EUR could support German exporters. Economic data, central bank decisions, and geopolitical developments will remain key drivers of the DAX’s performance.

Read our detailed analysis of how global market dynamics influence the DAX’s performance here.