DAX Index Today: ECB Policy Shifts, US Indicators, and Corporate Earnings

The Thursday Overview of the DAX Performance

The DAX declined by 0.79% on Thursday. Reversing a 0.11% gain from Wednesday, the DAX ended the session at 17,955.

The ECB Press Conference

On Thursday, the ECB signaled plans to cut interest rates despite fading bets on a June Fed rate cut. However, investor sentiment toward the Fed rate path remained a headwind.

US Economic Calendar: US Producer Prices Signal Sticky Consumer Price Inflation

On Thursday, inflation remained a focal point. US producer price numbers for March signaled a sticky consumer price inflation outlook.

Producer prices increased 2.1% year-on-year after advancing 1.6% in February. Economists forecast a 2.2% increase. Core producer prices rose 2.4% year-on-year after increasing 2.1% in February. Economists expected core producer prices to rise by 2.3%.

The DAX reacted to the numbers and the ECB press conference, sliding to a session low of 17,865.

On Thursday, the Dow slipped by 0.01%. The Nasdaq Composite Index and the S&P 500 saw gains of 1.68% and 0.74%, respectively.

The Thursday Market Movers

Bank stocks reversed gains from Wednesday on ECB plans to cut interest rates. Deutsche Bank and Commerzbank saw losses of 2.47% and 4.02%, respectively.

Auto stocks continued to trend lower. Porsche and Volkswagen declined by 0.81% and 0.81%, respectively. Mercedes Benz Group fell by 0.34%, while BMW bucked the trend, gaining 0.36%.

Deutsche Telekom went ex-dividend, sliding 6.15%.

ECB Forecasts and ECB Commentary in Focus

On Friday, the ECB will be in focus again. The ECB Survey of Professional Forecasters will warrant investor attention. Inflation and growth forecasts could influence buyer appetite for DAX-listed stocks.

Moreover, investors should consider ECB commentary. ECB Executive Board Members Luis de Guindos and Frank Elderson are on the calendar to speak.

US Economic Calendar: Consumer Sentiment and the Fed

On Friday, preliminary Michigan Consumer Sentiment numbers will draw investor interest. Economists forecast the Michigan Consumer Sentiment Index to fall from 79.4 to 79.0 in April. Weaker-than-expected numbers could signal a pullback in consumer spending and raise bets on a June Fed rate cut.

Downward trends in consumer spending dampen demand-driven inflation.

After the inflation reports, investors should also monitor FOMC member speeches. FOMC members Raphael Bostic and Mary Daly are on the calendar to speak. Reactions to the inflation reports and views on the timing of Fed rate cuts warrant investor attention.

Away from the economic calendar, corporate earnings will also influence market risk sentiment. JPMorgan Chase (JPM), Wells Fargo (WFC), BlackRock (BLK), and Citigroup (C) are among the big names to release earnings on Friday.

Near-Term Outlook

Near-term trends for the DAX will likely hinge on ECB chatter and US economic indicators. Weaker-than-expected US consumer confidence numbers could raise bets on June Fed rate cut. However, FOMC members may have more impact. Away from the economic calendar, corporate earnings will move the dial.

In the futures, the DAX and the Nasdaq Mini were up 95 and 3 points, respectively.

DAX Technical Indicators

Daily Chart

The DAX remained above the 50-day and 200-day EMAs, sending bullish price trends.

A DAX return to the 18,250 handle would support a move toward the April 2 all-time high of 18,567.

ECB surveys, central bank commentary, the US economic calendar, and corporate earnings need consideration.

A drop below the 17,850 handle could give the bears a run at the 50-day EMA.

The 14-day RSI at 47.47 suggests a DAX fall through the 17,615 support level before entering oversold territory.

4-Hourly Chart

The DAX sat below the 50-day EMA while remaining above the 200-day EMA, sending bearish near-term but bullish longer-term price signals.

A break above the 50-day EMA would give the bulls a run at the 18,350 handle. A DAX return to the 18,350 handle could bring the all-time high into play.

Conversely, a drop below the 17,800 handle could signal a DAX fall toward the 17,615 support level.

The 14-period 4-hour RSI at 36.40 indicates a DAX break below the 17,800 handle before entering oversold territory.