Today, the DAX 40 opened at 18755.86 but has since declined by 0.24% to 18712.42, influenced by weaker-than-expected German Producer Price Index (PPI) data.
Key Points
- The DAX 40 rose 0.14% on Monday, closing at 18755.86 amid ECB rate path uncertainty.
- Rheinmetall AG surged 3.75% due to geopolitical tensions, while German auto stocks fell following Volkswagen’s downgrade.
- Fed speeches later today could significantly impact market sentiment and trading activity on the German index.
DAX 40 Daily Price Analysis – 21/05/2024
On Monday, the DAX 40 saw a slight increase of 0.14%, closing at 18755.86. The trading session was uncertain regarding the ECB’s post-June rate path, which capped gains. Federal Reserve speakers maintained a cautious stance following recent US inflation and retail sales data, indicating a need for more confidence in inflation trends before considering rate cuts. Despite this cautious tone, investor optimism for a potential September Fed rate cut remained, with the probability of a rate hold in September rising from 35.2% to 38.2%, according to the CME FedWatch Tool.
The session saw significant movement in specific stocks. Rheinmetall AG surged by 3.75% due to geopolitical tensions in the Middle East. SAP and Infineon Technologies also posted gains of 1.33% and 1.32%, respectively, as tech stocks rallied ahead of the NVIDIA earnings report. Conversely, the German automotive sector struggled, with Mercedes Benz Group, BMW, Daimler Truck Holding, Volkswagen, and Porsche all closing in negative territory following Morgan Stanley’s downgrade of Volkswagen.
Today, the DAX 40 opened at 18755.86 but has since declined by 0.24%, currently trading at 18712.42. This drop reflects ongoing investor concerns over the ECB’s rate path and the broader economic outlook. Early trading was influenced by lower-than-expected German Producer Price Index (PPI) data, which heightened expectations for post-June ECB rate cuts as it signaled reduced inflationary pressures due to weaker demand.
Key Economic Data and News to Be Released Today
Later in the session, market participants will closely monitor speeches from several Fed officials, including Christopher Waller, Thomas Barkin, John Williams, Raphael Bostic, and Michael Barr. Given recent signals from the Fed regarding a potential “higher-for-longer” rate path, any commentary on inflation and interest rates could significantly impact market sentiment and trading activity. Investors will look for clues on the Fed’s future policy direction, which could exacerbate or alleviate current market volatility.
DAX 40 Technical Analysis – 21/05/2024
From a technical analysis perspective, the Dax 40 index is bullish on the higher timeframe. However, it is bearish on the 15-minute timeframe, trending slowly below the 200 EMA.
However, the RSI shows conflicting signals because it shows that the index is currently oversold, leaving us a clue that there might be a reversal to the upside or at least a short-term bullish retracement. Given these conflicting signals, short-term investors should consider waiting for extra trading confluences before committing to a position.
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Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.
