DAX Index Today: China Trade Data, the ECB, and the Federal Reserve

The Overview of the DAX Performance

The DAX advanced by 0.37% on Wednesday (May 8). Following a 1.40% rally on Tuesday (May 7), the DAX ended the session at 18,498.

German Industrial Production Dipped in March

On Wednesday, economic data from Germany warranted investor attention. Industrial production declined by 0.4% in March after rising by 1.7% in February. Economists forecast a 0.6% decline. However, industrial production increased by 1.0% from January to March compared with the previous three months.

The better-than-expected numbers aligned with expectations of an improving macroeconomic environment.

However, corporate earnings results were mixed, limiting the gains for the session. Munich Re, Siemens Energy AG, Fresenius SE, and Continental AG released earnings results on Wednesday.

Fed Speakers Impact Buyer Demand for Riskier Assets

On Wednesday, FOMC member chatter garnered investor interest amidst increasing uncertainty about the Fed rate path.

FOMC member Susan Collins added to the complexities of a September Fed rate cut. The Boston Fed President wanted the economy to cool down to gain confidence in bringing inflation to the 2% target. The comments signaled a higher-for-longer rate path that could further limit the number of rate cuts in 2024.

There were no stats from the US for investors to consider, leaving corporate earnings to influence market risk sentiment.

On Wednesday (May 7), the Dow gained 0.44%. However, the Nasdaq Composite Index fell by 0.18%, while the S&P 500 ended the session flat.

The Tuesday Market Movers

Siemens Energy AG surged 12.11% as investors reacted to a better outlook for 2024.a

Munich Re Group and Fresenius SE advanced by 3.19% and 1.24%, respectively, with Adidas gaining 0.18%. Puma rallied 11% on Q1 earnings results and projections, contributing to the gains for Adidas.

However, Zalando SE slid by 5.09% as investors reacted to a fall in Q1 sales.

BMW missed profit forecasts, dragging the auto sector into negative territory. BMW slid by 2.93%. Daimler Truck Holding and Mercedes Benz Group fell by 1.10% and 1.00%, respectively. Porsche declined by 0.81%, with Volkswagen ending the session down 0.72%.

China Trade Data Signals an Improving Demand Environment

Trade data from China could set the tone for the Thursday (May 9) session. Better-than-expected import and export numbers signaled a pickup in demand. Exports increased by 1.5% year-on-year in April, with imports surging 8.4%.

ECB Commentary in Focus

Investors should also monitor ECB commentary throughout the European session.

ECB Vice President Luis de Guindos, Piero Cipollone, and Elizabeth McCaul are on the calendar to speak. Views on the ECB rate path beyond June need consideration.

There are no stats from Germany or for the Eurozone for investors to consider.

US Economic Calendar: US Jobless Claims and the Fed

Later in the Thursday session, US jobless claims data will warrant investor attention. After the softer-than-expected US Jobs Report, a jump in jobless claims could raise investor bets on a September Fed rate cut.

Economists forecast initial jobless claims to rise from 208k to 210k in the week ending May 4.

Near-Term Outlook

Near-term trends for the DAX will hinge on central bank chatter. ECB support for multiple rate cuts could shift the focus to the Fed as inflationary pressures linger. The next round of consumer and producer price inflation figures could prove pivotal for the DAX and the broader global equity markets.

On the Futures markets, the DAX was up by 23 points, while the Nasdaq mini was down by 27 points.

DAX Technical Indicators

Daily Chart

The DAX sat well above the 50-day and 200-day EMAs, affirming the bullish price signals.

A DAX break above the Wednesday (May 8) high of 18,542 would support a breakout from the April 2 all-time high of 18,567 to target 18,650.

Central bank commentary and US labor market data need consideration.

However, a fall below 18,350 could signal a drop below the 18,000 level. A break below 18,000 would bring the 50-day EMA into play.

The 14-day RSI at 63.76 suggests a DAX move to 18,650 before entering overbought territory.

4-Hourly Chart

The DAX held comfortably above the 50-day and 200-day EMAs, reaffirming the bullish price trends.

A DAX return to the all-time high of 18,567 could support a move to 18,650.

Conversely, a DAX drop below the 18,350 handle could signal a fall through 18,200 to target the 50-day EMA.

The 14-period 4-hour RSI at 72.95 shows the DAX in overbought territory. Selling pressure may increase at the 18,500 level.