DAX Index Today: Investors Eye Inflation and Sentiment as DAX Stocks Steady

The Overview of the DAX Performance

On Monday (June 17), the DAX advanced by 0.37%. Partially reversing a 1.44% slide from Friday (June 14), the DAX closed the session at 18,068.

Economic Data from China Sends Mixed Signals

From China, industrial production and fixed asset investment numbers disappointed, testing buyer demand for riskier assets.

Industrial production increased 5.6% year-on-year in May after a rise of 6.7% in April. Furthermore, fixed asset investment advanced 4.0% (year-to-date) year-on-year after an increase of 4.2% in April. The numbers signaled slower activity across the manufacturing sector.

However, retail sales were up 3.7% year-on-year compared with 2.3% in April.

Marine Le Pen Calms Snap French Election Nerves

National Rally party leader Marine Le Pen eased investor jitters about the snap French Election on Monday. Le Pen reportedly said she would not call for Macron to resign if the far-right wins.

US Manufacturing PMIs and Fed Chatter

Later in the session on Monday, the NY Empire State Manufacturing Index increased from -15.6 to -6.0 in June, easing fears of a US hard landing.

However, hawkish Fed chatter reduced investor bets on a September Fed rate cut. Philadelphia Fed President Patrick Harker supported a single Fed rate cut if the US economy progresses aligned with projections.

The US equity markets brushed aside the hawkish comments, with the CME FedWatch Tool continuing to signal a September Fed rate cut.

On Monday, the Nasdaq Composite Index and S&P 500 advanced by 0.95% and 0.77%, respectively. Furthermore, the Dow gained 0.49%.

The Monday Market Movers

Bank stocks were in recovery mode at the start of the week. Deutsche Bank gained 1.61%, with Commerzbank advancing by 0.94%.

Auto stocks contributed to the gains despite lingering concerns about a China retaliation to EU tariffs on EV imports from China. BMW rose by 1.36%. Daimler Truck Holding and Mercedes Benz Group saw gains of 0.88% and 0.62%, respectively. Porsche and Volkswagen ended the session up 0.61% and 0.62%, respectively.

However, it was a mixed session for retail stocks. Zalando SE rallied 2.80%, while Adidas slid by 2.58%. News of an investigation into reports of corruption in China sent Adidas shares into negative territory.

Eurozone Inflation, Economic Sentiment, and the ECB

Finalized Eurozone inflation and ZEW Economic Sentiment figures for Germany warrant investor attention on Tuesday.

According to preliminary figures, the Eurozone annual inflation rate rose from 2.4% to 2.6% in May. Upward revisions to the inflation numbers could test investor bets on a near-term ECB rate cut.

Furthermore, economists forecast the German ZEW Economic Sentiment Index to climb from 47.1 to 50.0. Better-than-expected numbers could drive buyer demand for DAX-listed stocks.

Beyond the numbers, ECB commentary also needs consideration. ECB Executive Board members Piero Cipollone and Luis de Guindos are on the calendar to speak. Comments regarding the economic outlook, inflation, and interest rate cuts could move the dial.

However, investors should also track French Election-related news.

US Retail Sales and FOMC Member Speeches

Later in the session on Tuesday, US retail sales figures could influence the Fed interest rate trajectory.

Economists forecast retail sales to rise by 0.3% in May after stalling in April. A larger-than-expected increase could reduce investor bets on a September Fed rate cut.

Moreover, investors should track FOMC Member speeches. Reactions to the US retail sales data and views on the timing of a Fed rate cut need consideration.

FOMC Members Thomas Barkin and Susan Collins are on the calendar to speak during the European session.

Near-Term Outlook

Near-term trends for the DAX will hinge on US retail sales data, central bank chatter, and the French elections. Furthermore, EU-China tariff-related news also needs consideration amidst concerns about the Chinese economy.

On the Futures markets, the DAX was up 62 points, while the Nasdaq mini was down by 9.

DAX Technical Indicators

Daily Chart

The DAX sat below the 50-day EMA while remaining above the 200-day EMA, sending bearish near-term but bullish longer-term price signals.

A DAX break above the 18,200 handle could signal a move toward the 50-day EMA. A move through the 50-day EMA could give the bulls a run at 18,500.

Eurozone inflation numbers, German ZEW Economic Sentiment, US retail sales, and central bank chatter require consideration.

Conversely, a DAX fall through the 18,000 handle could give the bears a run at the 17,750 handle.

The 14-day RSI at 39.42 indicates a drop to the 17,750 handle before entering oversold territory.

4-Hourly Chart

The DAX remained below the 50-day and 200-day EMAs, affirming the bearish price signals.

A DAX move through the 200-day EMA could bring the 18,250 handle into play. A break above the 18,250 handle would signal a move toward the 50-day EMA.

However, a DAX break below 18,000 could give the bears a run at the 17,615 support level.

The 14-period 4-hour RSI at 35.70 indicates a DAX drop to 17,750 before entering oversold territory.