DAX Index Today: ECB Rate Cuts, US Labor Market Data, and 19,000

The Overview of the DAX Performance

On Thursday (June 6), the DAX gained 0.41%. After advancing by 0.93% on Wednesday (June 5), the DAX closed the session at 18,653.

German Factory Orders and Eurozone Retail Sales

German factory orders unexpectedly declined by 0.2% in April after falling by 0.8% in March.

Furthermore, Eurozone retail sales fell by 0.5% in April after increasing by 0.8% in March.

The weaker-than-expected numbers fueled investor bets on multiple 2024 ECB rate cuts and buyer demand for DAX-listed stocks.

While the numbers influenced buyer demand for DAX-listed stocks, the ECB interest rate decision and press conference were the main events.

ECB Cuts Interest Rates But Holds Back the Promise of More

The ECB cut interest rates by 25 basis points to 4.25%, in line with market expectations.

However, the ECB press conference moved the dial. ECB President Lagarde stated inflation risks had risen, with the ECB data dependent. The ECB also expects the economy to continue its recovery, with wage growth and trade terms to affect growth trends.

US Labor Market Data Support Expectations of a Fed Rate Cut

US initial jobless claims increased from 221k to 229k in the week ending June 1. Economists expected claims of 220k.

The larger-than-expected increase supported the market bets on a September Fed rate cut. After the ADP private payroll figures, the jobless claims numbers raised expectations of a weaker US Jobs Report.

However, the US equity markets reflected investor caution before the US Jobs Report. On Thursday, the Dow gained 0.20%. However, the Nasdaq Composite Index and S&P 500 declined by 0.09% and 0.02%, respectively.

The Thursday Market Movers

SAP rallied 3.61% as investors reacted to upbeat guidance for 2026 and 2027.

Bank stocks were also among the front-runners. Commerzbank and Deutsche Bank saw gains of 3.14% and 1.69%, respectively.

However, auto stocks had another mixed session on Thursday. Daimler Truck Holding advanced by 1.39%. BMW and Mercedes Benz Group rose by 0.09% and 0.30%, respectively. Volkswagen and Porsche bucked the trend, falling by 0.57% and 0.04%, respectively.

German Industrial Production and Trade

On Friday (June 7), the German economy will be in the spotlight, with industrial production and trade data in focus.

Economists forecast industrial production to rise by 0.2% in April after falling by 0.4% in March.

Furthermore, economists expect the German trade surplus to widen from €22.3 billion to €22.6 billion in April. Economists predict imports and exports to increase by 0.6% and 1.1%, respectively. In March, imports and exports rose by 0.3% and 0.9%, respectively.

Upbeat economic indicators would signal an improving macroeconomic environment and drive buyer demand for DAX-listed stocks.

Other stats include finalized GDP and employment change figures for the Eurozone. However, barring revisions to the second estimate numbers, the stats from Germany will likely impact the DAX more.

Later in the session on Friday, US labor market data warrant investor attention.

The US Jobs Report and the Fed

The US Jobs Report will affect market risk sentiment and investor expectations of a September Fed rate hike.

Economists forecast nonfarm payrolls to increase by 185k in May after rising by 175k in April. Additionally, economists expect average hourly earnings to increase 3.9% year-on-year after rising 3.9% in April.

A deterioration in labor market conditions would support investor bets on a Fed rate cut and drive buyer demand for riskier assets.

Near-Term Outlook

Near-term trends for the DAX will hinge on the US Jobs Report. Weaker-than-expected US labor market data could raise investor bets on a September Fed rate cut. A more dovish Fed rate path could support a DAX move toward the all-time high of 18,893.

On the Futures markets, the DAX was down 17 points, while the Nasdaq mini was up by 23 points.

DAX Technical Indicators

Daily Chart

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

A DAX break above the 18,800 level could give the bulls a run at the all-time high at 18,893.

German economic indicators and the US Jobs Report need investor consideration.

Conversely, a DAX drop below the 18,500 level could signal a fall to the 50-day EMA.

The 14-day RSI at 55.68 suggests a move to the all-time high of 18,893 before entering overbought territory.

4-Hourly Chart

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

A DAX breakout from the 18,650 handle could signal a move toward the all-time high at 18,893.

However, a DAX fall through the 50-day EMA could bring the 18,500 handle into play.

The 14-period 4-hour RSI at 54.63 suggests a DAX move to the all-time high (18,893) before entering overbought territory.