DAX Index Gains as ECB Rate Cut and Weak Eurozone Data Shape Markets
Market Overview
On Thursday, September 12, the DAX rallied 1.03%, following a 0.35% gain from the previous day to close at 18,518.
Key DAX Market Movers
- Siemens Energy rallied 5.12%
- SAP and Infineon Technologies saw gains of 2.45% and 1.32%, respectively
- Commerzbank advanced by 2.18% on news of UniCredit buying a 9% stake
Plunging German Wholesale Prices Signal Economic Strain
German wholesale prices declined by 1.1% year-on-year in August, after falling by 0.1% in July. This marked fall indicated a weaker demand, raising expectations of an ECB rate cut.
The ECB Cuts Interest Rates
The ECB cut interest rates, aligning with expectations, while lowering its 2024 growth forecast from 0.9% to 0.8%. If the global economy avoids recession, lower borrowing costs may boost earnings and stock prices.
Eurozone Industrial Production in Focus
Investor interest is directed toward upcoming figures for Eurozone industrial production, with expectations of a 0.3% decline in July post a 0.1% drop in June. Disappointing numbers could impact market sentiment amid lurking recession fears.
US Economic Indicators Fuel Speculation
Soft producer prices have raised expectations for a potential 50-basis point Fed rate cut, supporting demand for DAX-listed stocks. The chance for this rate cut surged to 45.0% as of Thursday.
Expert Views on the Fed Rate Path
Commentary from Wall Street Journal’s chief economics correspondent indicates a preference toward a preemptive rate cut, setting the stage for potential market shifts.
Near-Term Outlook
Near-term trends for the DAX will likely hinge on upcoming US data and central bank commentary, with forecasts indicating a potential rise or risk of dip depending on economic indicators.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.