DAX Index Today: ECB’s Forward Guidance and US Producer Prices in Spotlight

The Wednesday Overview of the DAX Performance

The DAX advanced by 0.11% on Wednesday. Partially reversing a 1.32% slide from Tuesday, the DAX ended the session at 18,097.

US Economic Calendar: US CPI Report Impacts Riskier Assets

On Wednesday, the US CPI Report warranted investor attention. The US annual inflation rate accelerated from 3.2% to 3.5% in March. Moreover, the core inflation rate remained steady at 3.8%. Economists forecast annual and core inflation rates of 3.4% and 3.7%, respectively.

There were no German or Eurozone economic indicators for investors to consider.

Investor angst before the US inflation numbers sent the DAX to sub-18,000 for the first time since March 20. However, the DAX rebounded, with investors turning their attention to the ECB monetary policy decision.

On Wednesday, the Dow slid by 1.09%. The Nasdaq Composite Index and the S&P 500 ended the session down 0.84% and 0.95%, respectively.

The Wednesday Market Movers

Auto stocks extended their losses from Tuesday. BMW slid by 2.06%. Volkswagen and Mercedes Benz Group declined by 0.60% and 0.24%, respectively. Porsche bucked the trend, gaining 0.31%.

However, bank stocks reversed losses from Tuesday on expectations of a higher-for-longer Fed rate path. Deutsche Bank and Commerzbank ended the session up 2.41% and 1.88%, respectively.

ECB Monetary Policy and Press Conference

On Thursday, the ECB will take center stage. Economists expect the ECB to leave interest rates at 4.5%. Nevertheless, investors have raised bets on a June ECB rate cut. Forward guidance from the ECB press conference would be pivotal. More hawkish-than-expected chatter could impact buyer demand for DAX-listed stocks.

The bigger question will be whether the ECB would cut interest rates before the Fed.

US Economic Calendar: Producer Prices and Fed Chatter

On Thursday, US producer prices will attract investor attention. Higher-than-expected producer prices could further impact bets on a 2024 Fed rate cut.

Economists forecast producer prices to increase 2.2% year-on-year in March after advancing 1.6% in February. Additionally, economists predict core producer prices to rise 2.3% year-on-year after increasing 2.0% in February.

The predicted upswing in producer prices would suggest US consumer prices could trend higher. Producers increase prices in a rising demand environment, passing costs onto consumers.

Beyond the numbers, FOMC member chatter also needs monitoring. Views on inflation and the timing of interest rate cuts could move the dial. FOMC members Raphael Bostic, Susan Cook, and John Williams are on the calendar to speak.

Near-Term Outlook

Near-term trends for the DAX will likely hinge on the ECB monetary policy decision and press conference. More hawkish than expected ECB chatter could impact buyer demand for DAX-listed stocks.

In the futures, the DAX was down 1 point, while the Nasdaq Mini was up 2 points.

DAX Technical Indicators

Daily Chart

The DAX hovered above the 50-day and 200-day EMAs, affirming the bullish price trends.

A DAX return to the 18,250 handle would give the bulls a run at the April 2 all-time high of 18,567.

The ECB press conference, US producer prices, and Fed chatter warrant investor attention.

A drop below the 18,000 handle could signal a fall toward the 50-day EMA.

The 14-day RSI at 53.07 indicates a DAX move to the 18,500 level before entering overbought territory.

4-Hourly Chart

The DAX remained below the 50-day EMA while hovering above the 200-day EMA, affirming the bearish near-term but bullish longer-term price signals.

A breakout from the 50-day EMA would support a move to the 18,350 handle. A DAX return to the 18,350 handle could give the bulls a run at the all-time high, 18,567.

Conversely, a drop below the 18,000 handle would give the bears a run at sub-17,800 levels.

The 14-period 4-hour RSI at 41.26 suggests a DAX fall below the 17,800 handle before entering oversold territory.