DAX: Industrial Production & Trade Higher than Forecasts
German trade balance and industrial production expanded faster than analysts’ forecasts, but the pivot of expansion may still be far away.
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- Industrial production for November up 1.5%
- Trade balance showed surplus of €19.7 billion
- DAX rally takes a step back
The DAX is down 0.30% today after gaining 2.8% from the start of the year. Today’s data showed some positive signs, but the overall economic picture is still cloudy.
Industrial Production and Balance of Trade Show Improvement
Today’s data beat analysts’ forecasts on both counts. The market forecast Industrial Production to expand by 0.5% in November, and the number came in at 1.5%.
The balance of trade for November saw the surplus expand to €19.7 billion, compared to last month’s surplus of €13.4 billion. In this case, analysts had expected a surplus of €14.8 billion.
Both sets of data bring some relief to investors that have been seeing weak economic data for months. However, the trade data also showed that imports declined by 3.3%, compared to forecasts of a rise of 0.7%.
The decline in imports indicates further weakness in domestic demand. Exports increase by 2.1%, falling short of offsetting the internal contraction of demand.
Exports add around 50% to German GDP, so a decline in imports is significant in that domestic demand needs to remain in expansion for greater likelihood of economic expansion.
DAX Live Chart
DAX Technical View
The day chart for the DAX below shows a market in a bullish trend as determined by the Ichimoku System.
The first sign of weakness are showing. The last leg higher, from the start of 2025, may have failed to go past the all-time high of 20,531 (orange line). Today’s candle will confirm that if it closes in the red.
The RSI, in the lower pane, failed to go above the level of 70 in this last rally. The level of 70 indicates that the direction has a strong momentum.
The next support is a major one at 19,681 (blue line). This level of support coincides with the previous ATH and the bottom of the recent rally from the start of the year.
Resistance will come at the high this recent rally at 20,475 and major resistance at the ATH of 20,531.
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