DAX Index Today: China, the ECB, and US Consumer Inflation Expectations

Overview of the DAX Performance on Friday

The DAX declined by 0.16%. After rallying 0.71% on Thursday, the DAX ended the session at 17,815.

German Producer Prices and Industrial Production Signal Positive Demand Trends

On Friday, German industrial production increased by 1.0% in January after sliding by 2.0% in December. Producer prices also painted a rosier picture of the German economy. German producer prices were down 4.4% year-on-year in January versus 5.1% in December.

The data signaled a pickup in demand, aligning with the German trade data. Nonetheless, the producer prices supported bets on a June ECB rate cut.

US Jobs Report Impacts Buyer Demand for Riskier Assets

Later in the Friday session, the US Jobs Report garnered investor interest. Nonfarm payrolls increased by 275k, while the US unemployment rate increased from 3.7% to 3.9%. Average hourly earnings eased from 4.4% year-on-year to 4.3% in February.

The unemployment and wage growth numbers supported market bets on an H1 Fed rate cut.

However, profit-taking pressured the equity markets late in the European session.

On Friday, the Nasdaq Composite Index slid by 1.16%. The S&P 500 and the Dow saw losses of 0.65% and 0.18%, respectively.

The Fridays Market Movers

Rheinmetall AG tumbled by 3.37%, with tech and auto stocks contributing to the losses. Infineon Technologies and SAP saw losses of 1.65% and 0.47%, respectively.

Porsche fell by 1.13%, with Volkswagen ending the session down 0.03%. BMW and Mercedes-Benz Group gained 0.17% and 0.21%, respectively.

However, Symrise AG extended gains on the positive outlook for 2024, rallying 1.63%.

The ECB and China in Focus

On Monday, vehicle sales figures from China could influence market risk sentiment. Weaker-than-expected numbers could impact hopes of recent policy measures improving the demand environment.

Economists forecast vehicle sales to increase by 41.0% year-on-year in February, down from 47.9% in January.

However, investors must also consider ECB commentary. ECB Executive Board member Piero Cipollone is on the calendar to speak on Monday. Views on inflation, the economy, and the timeline to cut interest rates could move the dial.

US Economic Calendar: Consumer Inflation Expectations

On Monday, US consumer inflation expectations warrant investor attention later in the session. Hotter-than-expected inflation expectations could test buyer demand for DAX-listed stocks. Investors may show greater sensitivity to the report with the US CPI Report out on Tuesday.

Economists forecast consumer inflation expectations to remain at 3.0% in February.

While inflation numbers are in focus, there are no FOMC member speeches to consider. The FOMC entered the blackout period on Saturday, March 9.

Short-term Forecast

Near-term trends for the DAX will likely hinge on euro area and US inflation figures. Softer-than-expected inflation figures could fuel bets on May ECB and Fed rate cuts.

On Monday, the DAX futures and the Nasdaq mini were down 62 and 93 points, respectively.

DAX Technical Indicators

Daily Chart

The DAX hovered well above the 50-day and 200-day EMAs, sending bullish price signals.

A DAX return to the Thursday all-time high of 17,879 would support a move to the 18,000 handle.

ECB chatter and economic data from China and the US need consideration.

A drop below the 17,750 handle would give the bears a run at the 17,600 handle.

The 14-day RSI at 77.00 shows the DAX in overbought territory. Selling pressure could intensify at the ATH of 17,879.

4-Hourly Chart

The DAX remained above the 50-day and 200-day EMAs, confirming the bullish price trends.

A DAX break above the 17,879 all-time high would bring the 18,000 handle into play.

However, a DAX drop below the 17,800 handle would give the bears a run at the 17,650 handle.

The 14-period 4-hour RSI at 68.45 suggests a DAX return to the all-time high of 17,879 before entering overbought territory.