DAX Index Daily Price Forecast – EZ Macro Data To Set Pace For DAX’s Price Action

Dax to open positive but has high chance of downside move owing to cues from wall street and dovish forecast for euro zone inflation data.
Colin First
DAX Friday
DAX Friday

Germany equities were lower at the close on Thursday, as losses in the Technology, Software and Industrials sectors propelled shares lower. At the close in Frankfurt, the DAX declined 1.55%, while the MDAX index lost 1.39%, and the TecDAX index fell 2.92%. Declining stocks outnumbered rising ones by 442 to 260 and 69 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was up 2.28% to 23.78. European market had a negative close yesterday on risk averse trading post rare revenue warning from Apple. As Brexit and European economic woes continued to dominate market inspiring risk off investor sentiment which was further boosted by bearish cues from international market causing European equities and indices to close in red yesterday.

Macro Data Outcome Could Force DAX on Bear’s Path

Global markets are on edge today as dire U.S. economic data slammed Wall Street overnight and pushed investors to bet the Federal Reserve could reverse its policy tightening before the end of this year. Meanwhile fears of Sino-U.S trade war possibly continuing to escalate post the 90-day deadline and ongoing events that hint at possibility of such a situation has increased investor worries as Sino-U.S trade war will continue to drag down global economy with it. This was one of the major factors that drove a surge of volatility last year and continues to influence risk-off price action in equity market even after holiday season. Sino-U.S. trade war woes comes into focus despite positive developments as Apple Inc., cut its revenue forecast for the first time in nearly 12 years, blaming weaker iPhone sales in China.

US market also had other factors which inspired bearish action such as disappointing survey data from ISM which showed U.S. factory activity slowed more than expected in December which is clear sign that US economy is slowing down. US Treasury Yield is also continuing to decline with 10-yr yield hitting lowest in a year all of which added to bearish market sentiment. German market which is highly susceptible to changes in US Wall Street is highly likely to be affected over such developments. Meanwhile positive action in major Asian market is expected to provide bullish cues to European market. DAX futures trading in international market is up by 0.72% ahead of Frankfurt market opening which suggests DAX could open bullish and trade positive but is highly susceptible to downside move on  risk off market sentiment as political and economic issues continue to persist while Eurozone inflation data are also set to release shortly and have bearish forecast.

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