DAX Price Forecast: European Stock Markets Rally Before Easter Weekend

Highlights

• European stock markets end week on positive note before Easter weekend
• Banks increase by 1.8%, while travel and leisure sector gains by 1.4%
• Investors are bracing for US non-farm payrolls data amidst recession talk and Fed rate uncertainty

Overview

European stock markets ended Thursday on a positive note, just before the start of the four-day Easter weekend.

Germany’s DAX rose by 0.50%, settling at 15597.89, while the UK’s FTSE 100 Index increased by 1.03%, finishing at 7741.56. The CAC 40 Index of France closed at 7324.75, up 0.12%, with the benchmark Stoxx 600 index rising by 0.5%.

The Stoxx 600 had experienced three consecutive sessions of marginal losses, but it rebounded on Thursday, finishing up 0.25% for the week. This positive news was a relief for investors who have been concerned about the recent pessimistic trend in the market.

European Banks Continue Positive Trend While Travel and Leisure Sector Gain

According to recent reports, banks increased by 1.8%, continuing their generally positive trend after a period of volatility.

UBS and Credit Suisse bosses faced shareholders this week, with the former controversially acquiring the latter in a rushed deal.

The travel and leisure sector also saw gains of 1.4%, with Tui leading European stocks after reporting strong booking demand. However, household goods stocks declined by 1.3%, while retail fell by 0.5%.

Investors Brace for US NFP Data Amid Recession Talk, Fed Rate Uncertainty

Investors are preparing for the release of US non-farm payrolls data on Friday, while US and European markets will be closed.

There have been suggestions that the US economy is slowing, with growth in private payrolls slowing more than anticipated, job openings dropping to their lowest level in almost two years, and the ISM Purchasing Managers’ Index for services declining.

This has led to renewed talk of a US recession, and markets are uncertain about what it will mean for Federal Reserve rate hikes.

Currently, financial markets are pricing in a 51% chance of the Fed holding rates steady at its next meeting, according to CME’s FedWatch tool.

Europe’s Stronger Economic Figures Outweigh US Dollar’s Slight Gain

The dollar made slight gains, and US stocks were lower through the morning amid the gloomier economic picture.

However, in Europe, figures released on Thursday showed that German industrial production increased by 2% in February, more than forecasted, and UK house prices rose unexpectedly.

Additionally, a speech by the European Central Bank’s chief economist, Philip Lane, on Wednesday added to expectations of another rate hike in May, as he emphasized that food price inflation in the bloc was still rising.

For a look at all of today’s economic events, check out our economic calendar.