DAX Outlook: Economic Data and Fed Rate Cut Bets

Wednesday, 18 September 2024, 07:49

DAX outlook is influenced by recent economic data and Fed rate cut bets. The index saw a 0.50% rise, led by notable gains in Zalando and Siemens Energy. Investor sentiment in Germany, however, declines, signaling challenges ahead.

Fxempire — DAX Outlook: Economic Data and Fed Rate Cut Bets

DAX Market Overview

On Tuesday, September 17, the DAX advanced by 0.50%, recovering a 0.35% loss from the previous day to close at 18,726.

Key DAX Market Movers

Zalando SE led the gains, surging 7.33%.
Kingfisher raised the lower end of its annual profit forecast, boosting demand for retail stocks.
Rate-sensitive Siemens Energy AG and Infineon Technologies rallied 4.26% and 3.24%, respectively, on ECB and Fed rate cut bets.
Auto stocks also contributed, with Volkswagen and Porsche ending the day up 1.36% and 1.18%, respectively.

German Investor Sentiment Slumps

On Tuesday, the German ZEW Economic Sentiment Index tumbled from 19.2 in August to 3.6 in September, signalling a grim economic outlook. ZEW President Professor Achim Wambach remarked on the report, stating, “Hopes for an early improvement in the economic situation are dwindling.”

Eurozone Inflation in Focus

Finalized inflation figures for the Eurozone will draw investor interest. The annual inflation rate fell from 2.6% in July to 2.2% in August. A downward revision could raise investor bets on a Q4 2024 ECB rate cut, boosting demand for DAX-listed stocks.

US Retail Sales Signal Resilience

US retail sales data eased investor concerns about a hard US economic landing. Retail sales increased by 0.1% in August after a 1.1% surge in July. Nonetheles, the CME FedWatch Tool signalled an increased chance of a sizeable Fed rate cut.

Near-Term Outlook

Near-term DAX trends hinge on Eurozone inflation numbers and the Fed interest rate decision. Softer inflation could boost demand for DAX stocks. However, investor caution may grip the DAX, with the FOMC interest rate decision due soon.

DAX Technical Indicators

The DAX remains above the 50-day and 200-day EMAs, affirming bullish price signals. A breakout from 18,750 could support a move to the all-time high at 18,991. Investor consideration of Eurozone inflation and Fed comments is crucial.

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.