European tech stocks like Infineon Technologies and SAP experienced losses, while auto stocks had a mixed session with companies like Daimler Truck Holding and Volkswagen declining, and others like Mercedes Benz Group and Porsche advancing. The upcoming speech by ECB Chief Economist Philip Lane could provide insights into inflation, economic outlook, and ECB interest rate trajectory, influencing investor sentiment. French General Election chatter may also impact the ECB rate path, adding uncertainty to the market.
The NFIB Business Optimism Index is scheduled to be released, and a higher-than-expected reading could potentially affect investor expectations of Fed rate cuts in 2024. Strong business optimism may lead to increased investment and job creation, tightening labor market conditions and potentially boosting consumer spending. The US CPI Report and Fed interest rate decision are key events that investors should watch closely, as they could have a significant impact on market trends.
With higher-than-expected US inflation numbers and more hawkish FOMC Economic Projections on the horizon, buyer demand for DAX-listed stocks may be influenced. Factors such as French politics, ECB commentary, US CPI Report, and the Fed’s stance will determine the near-term trends for the DAX. Concerns about the French General Election, coupled with US inflation numbers and a hawkish Fed, could lead to a potential decline in the DAX index. However, the index currently shows bullish signals, with support levels at 18,500 and 200-day EMAs. A breakout above 18,500 could pave the way for a move towards 18,650, potentially reaching as high as 18,800.
The DAX’s performance in the futures markets indicates a slight increase, while the Nasdaq mini shows a decrease. Technical indicators like the 14-day RSI at 49.33 suggest a possible fall below 18,250, which could trigger a bearish trend and push the index towards 18,000. Traders and investors need to closely monitor ECB commentary, US business optimism data, and euro area politics to make informed decisions in a volatile market environment.