DAX Index Today: Market Dynamics Shift as Investors React to China Trade Tensions

The Overview of the DAX Performance

On Thursday (June 13), the DAX slid by 1.96%. Reversing a 1.42% rally from Wednesday (June 12), the DAX ended the session at 18,266.

German Wholesale Prices See Less Marked Fall in May

German wholesale price trends signaled an improving demand environment. Wholesale prices declined 0.7% year-on-year in May after a fall of 1.8% in April.

Furthermore, wholesale prices increased by 0.1% month-on-month after advancing by 0.4% in April.

Upward trends in wholesale prices could signal a pickup in consumer price inflation. A pickup in demand-driven inflation could force the ECB to delay the timing of a second interest rate cut.

Industrial production numbers for the Eurozone had a limited impact on the DAX. Industrial production unexpectedly fell by 0.1% in April after an increase of 0.5% in March.

US Producer Prices and Jobless Claims

Later in the session, US producer prices and jobless claims attracted investor attention.

Producer prices fell by 0.2% month-on-month in May after rising by 0.5% in April. Additionally, core producer prices stalled after rising by 0.5% in April.

Producer prices are a leading indicator of consumer price inflation. The softer-than-expected numbers could raise investor bets on a September Fed rate cut.

Furthermore, US initial jobless claims increased from 229k to 242k in the week ending June 8.

On Thursday, the Dow fell by 0.17%. However, the Nasdaq Composite Index and S&P 500 saw gains of 0.34% and 0.23%, respectively.

The Thursday Market Movers

Porsche slid by 5.83%, with Volkswagen declining by 3.47%. BMW and Mercedes Benz Group ended the session down 2.22% and 1.80%, respectively. Fears of a China retaliation against EU tariffs on electric vehicles from China impacted buyer demand for auto stocks.

Bank stocks extended their losses from Wednesday. Commerzbank and Deutsche Bank declined by 2.24% and 2.90%, respectively.

Tech stocks succumbed to the risk-off mood. Siemens Energy AG slid by 3.04%, with SAP declining by 1.89%. Infineon Technologies fell by 1.51%.

Eurozone Trade Data and ECB Chatter

On Friday (June 14), trade data for the Eurozone will warrant investor attention.

Economists forecast the trade surplus to narrow from €24.1 billion to €20.0 billion in April.

Beyond the headline number, investors should consider import and export trends. A narrower trade surplus, stemming from higher imports than exports, could signal an improving demand environment.

Beyond the numbers, ECB chatter, French politics, and updates from the EU Commission on China EV tariffs also need consideration.

ECB President Christine Lagarde and Chief Economist Philip Lane are on the calendar to speak. ECB Executive Board members Luis de Guindos and Isabel Schnabel will also deliver speeches.

US Consumer Sentiment in Focus

Later in the session on Friday, Michigan Consumer Sentiment figures could influence buyer demand for DAX-listed stocks.

Economists forecast the Michigan Consumer Sentiment Index to increase from 69.1 to 72.0 in June.

An upward trend in consumer confidence could signal a pickup in consumer spending and demand-driven inflation. After the recent FOMC economic projections, investors may be more sensitive to US economic indicators and effects on investor expectations of a Fed rate cut.

Beyond the headline numbers, the Michigan Consumer Inflation Expectations Index also needs consideration.

Downward trends in consumer inflation expectations could drive buyer demand for DAX-listed stocks.

Near-Term Outlook

Near-term trends for the DAX will hinge on French election news, updates from the EU Commission on China tariffs. Furthermore, central bank chatter also need consideration.

On the Futures markets, the DAX and the Nasdaq mini were up by 33 and 25 points, respectively.

DAX Technical Indicators

Daily Chart

The DAX hovered 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 50-day EMA would support a return to 18,650. A breakout from 18,650 could signal a move to the 18,800 handle.

Eurozone trade data, US consumer sentiment, and central bank commentary require consideration.

Conversely, a DAX fall below the 18,250 handle could signal a drop to the 18,000 handle.

The 14-day RSI at 43.11 indicates a return fall to the 18,000 handle before entering oversold territory.

4-Hourly Chart

The DAX sat below the 50-day while holding above 200-day EMAs, affirming the bearish near-term but bullish longer-term price signals.

A DAX return to 18,400 could give the bulls a run at the 50-day EMA. A break above the 50-day EMA would support a move to the 18,650 handle.

However, a DAX drop below the 200-day EMA could bring sub-18,000 into view.

The 14-period 4-hour RSI at 38.35 suggests a DAX fall to 18,000 before entering oversold territory.