DAX Index Daily Fundamental Forecast – August 17, 2017

The DAX index recovered slightly during the course of the day yesterday as the risk sentiment continued to improve across the world. The tension between North Korea and the US continued to subside, which is something that is expected considering the costs of war in this day and age. North Korea and US have a habit of exchanging barbs against each other for quite many years now and probably there will come a time when their statements will no longer elicit as much of a reaction from the markets as we have seen now.

DAX Moves Higher on Recovery Mode

This de-escalation of tension between the 2 countries has led to a recovery in the stock markets around the world and the DAX, which has been increasingly under the influence of the global markets in recent times, has followed suit and moved higher and it closed the day yesterday just above the 12200 mark. With the FOMC meeting minutes being dovish for the dollar, the US stock indices moved higher late yesterday and this is likely to affect the DAX today.

We expect the DAX to open stronger today but it remains to be seen whether the bulls would be able to hold on to their gains through the course of the day. The domestic factors in Germany have been on the background for the past few weeks with the talk of tapering from the ECB and the happenings in the US dominating the markets in recent times. We expect the elections in Germany come into the horizon pretty soon and then we are likely to see much more volatility in the DAX.

Looking ahead to the rest of the day, we do not have any major news from Germany but we have the CPI data from the Eurozone as such. As mentioned above, we can expect a strong opening for the DAX today but we believe that the region around 12350 should serve as the ceiling for now.