DAX Index Daily Fundamental Forecast – December 19, 2017

The DAX index finally found some life yesterday and began to move higher and broke through the 13200 region and continued to move higher. There was no major economic news to drive this kind of a move and the fact that it happened on a Monday, after so many days and weeks of consolidation and ranging, was even more surprising.

DAX Finally Breaks Through

The traders had all but given up hope of the DAX getting to see any kind of action over the next couple of weeks as we head into the fag end of the year. But it is at this time that the index chose to get into some action. One of the factors driving the move higher was the increase in the global sentiment surrounding risk. The anticipation over the passage of the tax reform bill has helped to fuel a bull run in the US stock indices and this has helped to push the risk assets higher. The bill is expected to give a lot of tax cuts for the corporates and spur growth for them and this factor has helped the stocks to rise.

But the DAX, which had largely ignored any major moves in the other stock markets, chose to react to this and move higher as well. The other reason is the positive reinforcement over the Brexit process from the UK PM May over the weekend. She made it clear that she was determined to make sure that a deal was pushed through in the Brexit talks and any kind of deal is likely to be beneficial for both the UK and Europe and also remove any kind of uncertainty that is existing in the markets.

With this background, the index rose through the 13300 region and managed to close the day above this region and it remains to be seen whether this momentum would continue in the short term leading up to the end of the year. As for today, there is no major economic news from Germany or the Eurozone as the focus is firmly on the tax bill in the US.