DAX Index Today: Investor Focus Shifts to US Inflation and the ECB

The Monday Overview of the DAX Performance

The DAX advanced by 0.79% on Monday. Partially reversing a 1.24% slide from Friday, the DAX ended the session at 18,319. The DAX advanced for the eleventh time in thirteen sessions.

German Trade Terms, Industrial Production, and the Middle East

The German economy was in focus on Monday. Industrial production and import figures for February suggested an improving demand environment.

The German trade surplus narrowed from €27.6 billion to €21.4 billion. Imports increased by 3.2%, while exports fell by 2.0%. Exports to EU countries slid by 3.9%, while exports to non-EU countries increased by 0.4%.

However, industrial production numbers were upbeat. In February, industrial production rose by 2.1% after increasing by 1.3% in January. The auto and chemical industries impressed.

Beyond the economic data, easing geopolitical tensions drove demand for riskier assets.

US Economic Calendar: Consumer Inflation Expectations Steady at 3%

On Monday, the first set of US inflation numbers garnered investor interest. US Consumer Inflation Expectations remained steady at 3% in March. Economists expected a reading of 2.9%. The DAX responded to the report, easing back from a session high of 18,326. Sticky US inflation numbers could end bets on June Fed rate cut. The all-important US CPI Report will be in the spotlight on Wednesday.

On Monday, the Nasdaq Composite Index gained 0.03%. The Dow and the S&P 500 declined by 0.03% and 0.04%, respectively.

The Monday Market Movers

Online retailer Zalando SE surged 7.39%. Investors reacted to Citigroup (C) upgrading the stock from neutral to buy. Adidas advanced by 1.49%.

Auto stocks contributed to the gains despite a mixed session. Mercedes Benz Group and BMW rallied 2.54% and 2.00%, respectively. Auto sector production numbers for February drove buyer demand for auto stocks. Porsche advanced by 1.30%, while Volkswagen declined by 0.24%.

ECB Commentary and Pre-Policy Decision Sentiment

On Tuesday, investors will likely shift focus to the ECB interest rate decision (Thurs).

The markets expect the ECB to leave interest rates at 4.5% on Thursday. However, recent ECB member commentary has raised investor bets on a June ECB rate cut. Pre-ECB jitters could test buyer demand for DAX-listed stocks. There are no economic stats for Germany or the Eurozone to consider before the ECB monetary policy decision.

While there are no economic stats to consider, ECB member chatter warrants investor attention. Support for a June rate cut could drive buyer demand for DAX-listed stocks.

US Economic Calendar: Economic Sentiment and Fed Chatter

On Tuesday, the RCM/TIPP Economic Optimism Index will be in focus later in the session. Economists consider the Index a leading indicator of consumer confidence and spending. A larger-than-expected increase could further impact bets on a June Fed rate cut. Economists forecast the Index to increase from 43.5 to 44.2 in April.

However, the US equity markets could trend sideways before US inflation numbers on Wednesday.

With the US economy and inflation in focus, investors must monitor FOMC member chatter. Views on inflation and the timing of a Fed rate cut could influence market risk sentiment.

Near-Term Outlook

Near-term trends for the DAX will hinge on the US CPI Report, the ECB press conference, and Fed commentary. Softer-than-expected US inflation numbers and calls for June ECB and Fed interest rate cuts could support current price levels.

In the futures, the DAX was down 37 points, while the Nasdaq Mini was up by 7 points.

DAX Technical Indicators

Daily Chart

The DAX remained comfortably above the 50-day and 200-day EMAs, affirming bullish price signals.

A DAX break above the 18,350 handle would give the bulls a run toward the April 2 all-time high of 18,567.

Central bank chatter and US economic data warrant investor attention.

A drop below the 18,250 handle could bring sub-18,000 levels and the 50-day EMA into view.

The 14-day RSI at 63.45 indicates a DAX move to the 18,500 level before entering overbought territory.

4-Hourly Chart

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

A DAX break above the 18,350 level could support a move to the all-time high, 18,567.

Conversely, a drop below the 18,250 handle could give the bears a run at the 50-day EMA.

The 14-period 4-hour RSI at 52.81 suggests a DAX return to the all-time high before entering overbought territory.