Dax Index News: Mixed Forecast as Tariff Risks and US Inflation Threaten Rebound

DAX Eyes Rebound as US-EU Trade Clock Ticks

Investor optimism over a US-EU trade deal boosted demand for DAX-listed stocks. The DAX rose 0.26% to 24,224 in early trading on Tuesday, July 15.

The EU reportedly finalized further countermeasures targeting US goods as trade talks failed to progress toward a deal. According to CN Wire:

“The European Union has finalized a second list of countermeasures targeting US goods worth €72 billion ($84 billion), including Boeing aircraft, automobiles, and bourbon, as trade tensions escalate. The 206-page list, prepared by the European Commission, also includes machinery, chemicals, plastics, medical devices, electrical equipment, wines, and other agricultural products.”

However, President Trump said he was open to progressing trade talks with the EU. EU trade negotiators are set to return to the US ahead of the August 1 deadline. The EU faces a 30% tariff if trade talks fail.

Sector Performance: Banks and Auto Stocks Advance

Auto stocks opened higher on July 15 as focus intensifies on US-EU trade talks. Mercedes-Benz Group climbed 1.17%, with BMW, Porsche, and Volkswagen posting gains.

German banks also advanced ahead of key earnings from the US. Deutsche Bank climbed 1.02%, while Commerzbank rose 0.12.

German Economic Sentiment in Focus

Economic sentiment figures will draw interest early in the European session. Economists forecast Germany’s ZEW Economic Sentiment Index to rise from 47.5 in June to 50 in July. A pickup in sentiment toward the German economy could boost demand for DAX-listed stocks. On the other hand, a lower reading may weigh on sentiment.

While the July ZEW sentiment data is influential, trade developments remain the key driver for the DAX.

Wall Street Advances Ahead of Inflation and Corporate Earnings

US markets advanced on Monday, July 14, as investors turned their focus to upcoming inflation and corporate earnings reports. The Nasdaq Composite Index gained 0.27%, while the Dow and the S&P 500 rose 0.2% and 0.14%, respectively.

Hopes of US tariffs having a limited impact on the US economy lifted sentiment. Recent US labor market data have signaled a resilient US economy, easing recession fears. According to Polymarket, the chances of a US recession have fallen to 21%, down from 32% on June 27 and 66% in May.

US Inflation and Bank Earnings to Drive Risk Appetite

Later in the Tuesday session, US inflation figures will influence Fed rate cut expectations. Economists expect the annual inflation rate to rise from 2.4% in May to 2.7% in June and core inflation to hit 3% (May: 2.8%).

Hotter inflation readings could reflect the impact of tariffs on consumer prices, potentially delaying Fed rate cuts. A more hawkish Fed policy stance may impact risk assets such as the DAX. Conversely, softer inflation prints may boost Fed rate cut bets, lifting sentiment.

While the inflation data will be crucial, corporate earnings will also impact the DAX’s banking sector. US banking giants Citigroup (C), JP Morgan Chase, and Wells Fargo (WFC) are on the earnings calendar to release results today.

Near-Term Outlook

The DAX’s near-term outlook hinges on US-EU trade talks, US inflation data, and central bank policy signals.

• Bearish Scenario: Rising US-EU trade tensions, hotter-than-expected US inflation, or hawkish central bank rhetoric. Under these scenarios, the DAX may fall toward 24,000, potentially exposing the 50-day EMA.
• Bullish Scenario: A US-EU trade deal, cooler US inflation, and dovish central bank cues may drive the DAX toward the July high of 24,639.

DAX Technical Indicators

Daily Chart

Despite a three-day losing streak, the DAX remains above the 50-day and 200-day Exponential Moving Averages (EMA). The EMAs indicate a bullish bias.

A breakout above 24,500 could pave the way to the July 10 high of 24,639. Sustained buying pressure may enable the bulls to target 24,750.

On the downside, a drop below 24,000 could bring the 23,750 level into play. Increased selling pressure may expose the 50-day EMA.

The 14-day Relative Strength Index (RSI), at 56.65, indicates the DAX could climb to 24,750 before entering overbought territory (RSI > 70).

Final Thoughts

Volatility will likely persist as investors react to trade developments, key economic data, and central bank policy rhetoric.

Traders should monitor both technical and fundamental drivers and consult our economic calendar.