Despite positive PMI data, the ECB’s interest rate path remains unchanged due to inflation and wage growth concerns.
Key Points
- Today, the DAX 40 opened at 18,579.29 but dropped to 18,399.30, showing a 0.90% decline.
- German unemployment figures showed a sharp increase, raising expectations for ECB rate cuts.
- Upcoming data includes Eurozone consumer inflation expectations and the US JOLTs Job Openings Report, which could influence market sentiment and central bank policies.
DAX 40 Daily Price Analysis – 04/06/2024
The DAX 40 closed at 18,579.29 yesterday, experiencing a slight decline of 0.08% from its opening price of 18,593.66. Despite the modest drop, the day saw mixed performance across sectors. Notably, Siemens Energy AG rose by 2.33%, while SAP and Infineon Technologies gained 1.39% and 0.26%, respectively. Retail-linked stocks like Zalando SE and Adidas also saw gains, reflecting positive market sentiment in these areas. Conversely, the automotive sector had a mixed performance, with Porsche and Mercedes Benz Group experiencing minor declines.
The German Manufacturing PMI increased from 42.5 to 45.4 in May, indicating a less severe contraction in the manufacturing sector. This improvement and a rise in the Eurozone Manufacturing PMI from 45.7 to 47.3 suggest a gradual improvement in the macroeconomic environment. However, these numbers are not expected to significantly alter the European Central Bank’s (ECB) interest rate path, as inflation and wage growth remain key considerations.
As of today, the DAX 40 opened at 18,579.29 but has since dropped to 18,399.30, marking a 0.90% decline. The early session decline can be attributed to investor caution ahead of significant economic data releases. The current bearish trend indicates a lack of confidence among investors, possibly influenced by global economic uncertainties and mixed performances in the US equity markets.
German unemployment figures released today showed a sharp increase, moving from an expected 10 to 25. This unexpected rise signals worsening labor market conditions, which could lead to increased expectations for ECB rate cuts soon. The deteriorating employment situation adds pressure on the German economy, influencing investor sentiment and contributing to the DAX 40’s decline.
Key Economic Data and News to Be Released Today
Later in the day, Eurozone consumer inflation expectations are predicted to decrease from 3.0% to 2.8%. This could reinforce the narrative for multiple ECB rate cuts post-June if confirmed. Additionally, the US JOLTs Job Openings Report will be closely watched. A significant decline in job openings could signal a weakening US labor market, increasing the likelihood of a September Fed rate cut and potentially affecting global market sentiment.
DAX 40 Technical Analysis – 04/06/2024
The Dax index is currently trading at a critical point: it is trending below the 200 EMA, indicating continuous bearish tendencies. However, the RSI suggests that the bears should be careful before adding more positions.
A closer look at the RSI shows that the index trades at the oversold level. This suggests that the price might retrace soon or even reverse.
Dax 40 Fibonacci Key Price Levels 04/06/2024
Short-term traders planning to trade the Dax index today should keep a close eye on the following key price levels for the day:
| Support | Resistance |
| 18523.11 | 18675.05 |
| 18476.18 | 18721.98 |
| 18400.21 | 18797.97 |
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.
