Germany 30 (DAX) Price Forecast: Surges to 17,755 Amidst Daimler Truck Spike & Fed Cut Hopes
The DAX index, the German stock market, maintained its previous eighth consecutive session winning streak and remained well bid around 17,755 points. This upward momentum was propelled by several factors, including positive market sentiment fueled by strong corporate earnings reports.
Notably, Daimler Truck Holding surged 18% on the back of better-than-expected earnings and a positive outlook for 2024. Moreover, tech stocks such as Infineon Technologies and SAP benefited from optimism surrounding expectations of a Federal Reserve interest rate cut in June.
Hence, the performance of Daimler Truck Holding and tech stocks like Infineon Technologies and SAP can significantly impact the overall performance of the DAX index.
In contrast, previously released downbeat US data was seen as a key factor that capped further gains in the stock markets. Furthermore, the decline in both German and Eurozone Manufacturing PMI figures suggests continued challenges in the manufacturing sector.
This could potentially weigh on the DAX index, as it indicates ongoing economic uncertainties and possibly slower growth in the region.
Influence of Economic Indicators and Investor Sentiment
As we mentioned above that the performance of the DAX index, a key stock market index in Germany, was influenced by a combination of economic indicators and investor sentiment. However, the positive Services PMIs from China helped boost global markets, but Eurozone inflation figures, especially the easing core inflation rate in February, dampened expectations for an ECB rate hike in April.
On the data front, China’s Caixin Manufacturing PMI rose slightly to 50.9, boosting Asian markets. However, in the Eurozone, Germany’s Manufacturing PMI fell to 42.5, and the Eurozone’s to 46.5, though both were slightly higher than preliminary figures.
Eurozone core inflation eased to 3.1%, below expectations, with the annual rate at 2.6%. These lower inflation figures tempered expectations for an April ECB rate hike, which weighed on the DAX index.
Investors are now focusing on the Eurozone Sentix Investor Confidence Index for potential signs of improved sentiment toward the Eurozone economy, which could benefit DAX-listed stocks.
Federal Reserve Interest Rate Cut Stance and US Economic Data
On the US front, the Federal Reserve’s stance on interest rates and US economic data significantly influenced the DAX index. Investors increasingly bet on a potential Fed rate cut in June due to disappointing US macroeconomic data, like the ISM Manufacturing PMI and Michigan Consumer Sentiment Index, which fell below expectations in February.
Federal Reserve officials also made cautious comments on monetary policy tightening, reinforcing this dovish sentiment.
The latest ISM survey reveals a steeper decline in US manufacturing activity for February, with the ISM Manufacturing Index dropping to 47.8 and the New Orders Index to 49.2. Employment in the sector hit a seven-month low, and the Prices Paid Index slightly decreased.
Additionally, the University of Michigan’s Consumer Sentiment Index fell to 76.9, indicating subdued consumer sentiment and broader economic concerns.
Therefore, this combination of factors significantly influenced the DAX index, with investors increasingly betting on a potential Fed rate cut in June due to disappointing US macroeconomic data and cautious comments from Federal Reserve officials.
Germany 30 (DAX) Price Forecast: Technical Outlook
The Germany 30 (DAX) experienced a slight decline, dropping by 0.10% to close at 17,717.19. The index is positioned just below a pivotal level at 17,795.71, indicating a potential turning point.
Resistance is set at 17,850.00, with further barriers at 17,920.26 and 17,987.32, challenging upward movements.
Conversely, support levels are identified at 17,650.30, 17,569.40, and 17,487.19, providing a cushion against further declines. The Relative Strength Index (RSI) stands at 74, suggesting the market is nearing overbought territory.
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