Dax Index News: DAX Eyes 24,500 on Dovish ECB, Trade Hopes – Daily Forecast

DAX Inches Higher Ahead of Crucial ECB Rate Decision

The DAX rose 0.02% to 24,281 in early trading on Thursday, June 5, as investors turned their focus to the ECB’s policy decision and press conference. A softer Eurozone annual inflation rate, down from 2.2% in April to 1.9% in May, fueled hopes of the ECB signaling multiple rate cuts in today’s press conference..

Ahead of the European open, German factory orders rose 0.6% in April after surging 3.4% in March. The increase reflected robust domestic and euro area demand. However, foreign orders dropped 0.3%, signaling tariff-related pressure on external demand for German goods.

Ahead of the data, Oliver Rakau, Chief German Economist and ECB Commentator at Oxford Economics, remarked:

“Will scrutinize Germany’s April factory orders due tmr for any signs of uncertainty hitting capital goods orders. But the turnover data may be of more interest this time. Prelim data points to a sharp monthly fall signaling Q2 payback from Q1 tariff front-running.”

Persistent weakness in external demand may reinforce expectations of a dovish ECB rate path aimed at supporting growth.

Sector Performance

Bayer rallied 3.75% at the open. News of Goldman Sachs upgrading the stock recommendation from Neutral to Buy, and the US FDA approving an expanded use for its prostate cancer drug Nubeqa, drove the share price higher.

Auto stocks also advanced on progress toward a US-EU trade deal. Mercedes-Benz Group rose 0.65%, with BMW, Porsche, and Volkswagen also posting early gains.

US-EU Trade Talks in Focus

Investors should continue monitoring US-EU trade developments after progress on June 4. Optimism toward a trade deal would lift risk sentiment, while renewed friction could dampen risk appetite and weigh on the DAX.

ECB Decision Looms: Will Lagarde Hint at Multiple Cuts?

While trade developments are crucial, the ECB will take center stage today. Economists expect the ECB to cut rates by 25 basis points to 2.15%. Barring a surprise 50-basis point rate cut, the press conference will be key for DAX trends.

Hints of multiple rate cuts may lift the DAX, while caution from President Lagarde could trigger selling pressure.

Wall Street Mixed as US Data Softens

Wall Street was mixed on Wednesday, June 4. The Nasdaq Composite Index and S&P 500 advanced 0.32% and 0.01%, respectively, while Dow fell 0.22%.

Weak jobs and services data pointed to a softening in the US economy. ADP reported a 37k rise in private-sector jobs in May versus a 115k consensus. Additionally, the ISM Services PMI slid from 51.6 in April to 49.9 in May, dropping below the neutral 50 level.

Although these numbers support the case for a more dovish Fed, uncertainty around tariff-driven inflation contributed to mixed market sentiment.

US Jobless Claims and Fed Policy

Meanwhile, jobless claims will draw interest. Economists forecast initial jobless claims to fall from 240k (week ending May 24) to 235k (week ending May 31). A higher reading may boost bets on a 2025 Fed rate cut, while a lower print could temper expectations of a Fed move, pressuring risk assets, including the DAX.

In addition to economic data, Fed commentary and trade developments will continue to shape sentiment.

Near-Term Outlook

The DAX’s near-term path depends on incoming economic data, trade headlines, and central bank signals.

• Bearish Scenario: US recession fears, rising trade tensions, and hawkish ECB cues could send the index toward 23,750.
• Bullish Scenario: Easing US recession jitters, dovish ECB guidance, and easing US-EU trade developments may drive it toward 24,500.

DAX Technical Indicators

Daily Chart

The DAX remains above the 50-day and 200-day Exponential Moving Averages (EMA), signaling its bullish momentum.

A break above the June 4 record high of 24,346 could open the door to 24,500, with 24,750 as the next target.

On the downside, a drop below 24,000 may expose the 23,750 level, with 23,500 as the next major support level.

The 14-day Relative Strength Index (RSI) at 65.32 suggests the DAX has room to climb to 24,500 before entering overbought conditions (RSI > 70).

Final Thoughts

Volatility may persist as traders digest ECB commentary, US data, and trade headlines. German equities remain sensitive to fiscal policy announcements as well.

Traders should stay attuned to technical and fundamental drivers and consult our economic calendar.