Dax Index News: Outlook Brightens on Tariff Relief, ZEW Sentiment Forecast

DAX Edges Higher as US Focus Turns to EU Trade

Optimism over a pause in the US-China trade war bolstered demand for German-listed stocks on Tuesday, May 13. The DAX opened the session 0.15% higher, rising to 23,601.

Easing trade tensions, marked by the US lowering tariffs on Chinese goods from 145% to 30% and China cutting tariffs on US goods from 120% to 10%, boosted demand for risk assets.

However, President Trump shifted his focus to the EU on Monday, May 12, reportedly saying that the European Union is ‘nastier than China’ and ‘we’ve just started with them’. Trump signaled tough trade negotiations, adding that ‘they’ll come down a lot, you watch’ and ‘we have all the cards’.

Sector Performance

Bayer soared 9.27% in early trading after beating earnings estimates and reaffirming its 2025 outlook. Auto stocks also opened strongly, with Volkswagen rallying 1.83% and BMW rising 1.16%. Porsche and Mercedes-Benz Group posted early gains as well, though they trailed BMW.

ZEW Economic Sentiment in Focus

Later in the May 13 session, Germany’s ZEW Economic Sentiment figures will draw interest. Economists forecast the ZEW Economic Sentiment Index to surge from -14 in April to 13.7 in May. A sharp rise in sentiment could boost demand for German-listed stocks amid renewed tariff optimism.

Nevertheless, US-EU trade-related headlines will be crucial. Positive updates may drive risk appetite. However, signs of escalating tensions or higher tariffs may weigh on German export stocks.

US Markets Surge on Tariff Pause

Wall Street rallied on May 12 after the announcement of a 90-day tariff truce. The Nasdaq Composite Index jumped 4.35%, while the Dow and the S&P 500 gained 2.81% and 3.26%, respectively. The move eased recession fears and supported risk sentiment.

Lower tariffs may dampen inflationary pressures, enabling the Fed to adopt a more dovish stance. Lower borrowing costs would, in turn, support corporate earnings and demand for risk assets.

US CPI Report in Focus

Later today, investor focus will shift to US inflation data. Economists forecast the inflation rate to hold steady at 2.4% in April and core inflation to remain at 2.8%.

Lower inflation readings could raise bets on a June Fed rate cut, supporting equities. However, hotter-than-expected inflation may sink expectations of a June Fed move, weighing on risk assets.

Near-Term Outlook

The DAX’s near-term trajectory hinges on key economic data, trade developments, and central bank signals.

• Bearish Scenario: Intensifying US-EU tensions, rising US inflation, and hawkish central bank guidance could send the DAX below 23,500.
• Bullish Scenario: Optimism about a US-EU trade deal, softer US inflation, and dovish central bank signals could fuel a rally toward 23,750.

DAX Technical Indicators

Daily Chart

The DAX remains comfortably above the 50-day and 200-day Exponential Moving Averages (EMA), maintaining a bullish trend.

A breakout above the May 12 high of 23,912 could pave the way for a test of the 24,000 resistance level. A sustained move through 24,000 could bring 24,350 into play.

On the downside, a drop below 23,500 may enable the bears to target 23,350, with 23,000 the next key support level.

The 14-day Relative Strength Index (RSI) at 67.54 suggests the DAX could rise to 23,912 before entering overbought territory (RSI > 70).

Final Thoughts

With global trade developments and monetary policy expectations continuing to steer market sentiment, volatility could remain elevated. While the US-China tariff reprieve supports risk-on momentum, tensions with the EU present a new source of uncertainty. Domestic fiscal policy announcements from Germany, including spending plans, will influence investor outlook in the coming sessions.

As monetary policy signals, earnings updates, macro data, and geopolitical news continue dictating sentiment, traders should closely track technical and fundamental shifts.