DAX Index Today: Navigating German Industrial and Trade Data and US Inflation

The Friday Overview of the DAX Performance

The DAX slid by 1.24% on Friday. Reversing a 0.19% gain from Thursday, the DAX ended the session at 18,175. The DAX saw only its second loss from twelve sessions.

The Middle East, German Factory Orders, and Eurozone Retail Sales

On Friday, rising tensions in the Middle East and hawkish Fed chatter from Thursday sent the DAX down 1.28% within the opening hour of trading.

Additionally. the German economy was in focus. German factory orders increased by 0.2% in February after tumbling 11.4% in January. Economists expected factory orders to rise by 0.8%. The weaker-than-expected numbers left the DAX in negative territory.

Retail sales figures for the Eurozone also drew interest after the weak German retail sales numbers. Eurozone retail sales fell by 0.5% after stalling in January. Economists expected retail sales to decline by 0.4%.

US Economic Calendar: The US Jobs Report

The all-important US Jobs Report drove buyer demand for riskier assets. Nonfarm payrolls jumped 303k in March versus 275k in February. The US unemployment rate slipped from 3.9% to 3.8%. However, wage growth slowed. Average hourly earnings increased 4.1% year-on-year in March after advancing 4.3% in February.

Rising expectations of the Fed avoiding a US recession drove demand for riskier assets. The DAX reduced the deficit for the day, while the US equity markets recovered losses from Thursday.

On Friday, the Nasdaq Composite Index rallied 1.24%. The Dow and the S&P 500 saw gains of 0.80% and 1.11%, respectively.

The Friday Market Movers

Online retailer Zalando SE tumbled 5.72% on weaker-than-expected retail sales numbers for the Eurozone. Adidas fell by 0.74%.

Auto stocks ended the Friday session in negative territory after disappointing order numbers on Thursday. BMW and Volkswagen saw losses of 1.92% and 1.63%, respectively. Mercedes Benz Group and Porsche declined by 0.74% and 1.01%, respectively.

German Industrial Production and Trade in the Spotlight

On Monday, the German economy will be in the spotlight again. German industrial production and trade data will garner investor interest.

Economists forecast industrial production to increase by 0.6% in February after rising by 1.0% in January. However, economists expect the German trade surplus to narrow from €27.5 billion to €25.1 billion in February.

Better-than-expected numbers could increase demand for DAX-listed stocks amidst growing expectations of a June ECB rate hike.

Beyond the numbers, ECB commentary also needs monitoring as investors begin considering the ECB policy decision.

US Economic Calendar: Consumer Inflation Expectations and Fed Chatter

Later in the Monday session, US consumer inflation expectations numbers for March will draw investor interest. Economists forecast consumer inflation expectations to fall from 3.0% to 2.9%. Higher-than-expected inflation numbers could further impact bets on a June Fed cut. Investor sentiment toward Fed monetary policy may overshadow the influence of the ECB.

With inflation in focus, investors must also monitor FOMC member commentary. Further warnings of cutting interest rates too early could test buyer demand for DAX-listed stocks.

Near-Term Outlook

Near-term trends for the DAX will hinge on US inflation numbers and Fed speeches. A hotter-than-expected US CPI Report and hawkish Fed chatter could reduce bets on a June Fed rate cut. FOMC member reactions to the US Jobs Report and inflation figures also need consideration before the ECB policy decision (Thurs).

It was a mixed morning for the futures markets. The DAX was up 4 points, while the Nasdaq Mini was down by 16 points.

DAX Technical Indicators

Daily Chart

The DAX hovered well above the 50-day and 200-day EMAs, sending bullish price signals.

A DAX breakout from the 18,200 handle would support a move toward the April 2 all-time high of 18,567.

German industrial production, trade data, US consumer inflation expectations, and Fed chatter require investor attention.

A break below the 18,100 handle could support a drop toward the 50-day EMA.

The 14-day RSI at 58.59 suggests the DAX could return to the 18,500 handle before entering overbought territory.

4-Hourly Chart

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

A DAX breakout from 18,200 may signal a move toward the all-time high of 18,567.

Conversely, a break below the 50-day EMA could support a fall through the 18,000 handle.

The 14-period 4-hour RSI at 40.70 indicates a DAX drop below the 18,000 handle before entering oversold territory.