DAX Index Eyes 18,000 on ECB Rate Cut Bets, US Jobs Report in Focus

The DAX Index continues to capture investor attention as it rallied 0.71% on Thursday, closing at 17,843. With all eyes set on the US Jobs Report, the DAX’s performance is anticipated to be hinged on the outcome, with the index hovering near the crucial 18,000 mark.

Overview of DAX Index Performance on Thursday

Thursday witnessed a notable surge in the DAX Index, climbing to an all-time high of 17,879 and closing positively at 17,843, marking a 0.71% gain. This followed a marginal increase of 0.10% on Wednesday.

ECB Forecasts and Bets on a June ECB Interest Rate Cut

Despite German factory orders experiencing an unexpected 11.3% plunge in January, the DAX remained resilient. The European Central Bank (ECB) played a pivotal role, fueling investor optimism through downward revisions in inflation and growth forecasts, sparking bets on a potential June ECB rate cut. ECB President Christine Lagarde’s remarks further buoyed market sentiment.

US Labor Market Data and Bets on Fed Rate Cut

As investors closely monitor the US Jobs Report, initial jobless claims remained steady at 217k, allowing focus to shift towards Fed Chair Powell’s testimony. Powell’s reaffirmation of a likely Fed rate cut in the first half of 2024 bolstered market expectations, contributing to positive movements in major US indices.

Read more: US February NFP Preview: Forecast Points to 200K Job Growth

Thursday Market Movers: Impact on DAX Index

Symrise (AG) led gains with a notable 3.21% increase, supported by optimistic forecasts for 2024. Tech stocks, including Infineon Technologies and SAP, also saw upward momentum, driven by rising bets on ECB and Fed rate cuts. Conversely, auto stocks experienced a downturn, influenced by downward revisions in growth forecasts by the ECB Staff.

German Industrial Production and Producer Prices

Investor attention shifts to German industrial production and producer prices on Friday. Forecasts suggest a potential 0.2% increase in producer prices for January, following a 1.2% decline in December. Industrial production, expected to rise by 0.6%, holds significance amid concerns over a Q1 2024 German recession.

Eurozone GDP and US Economic Calendar

While Eurozone GDP and employment change figures for Q4 are anticipated, the US Jobs Report remains the focal point. Economists project nonfarm payrolls to increase by 200k in February, maintaining an unemployment rate of 3.7%. Attention also lies on wage growth figures.

Short-term Forecast and Technical Indicators for DAX Index

Near-term trends for the DAX are likely to hinge on the US Jobs Report and central bank actions. The index remains well above key EMAs, with a potential break above 17,879 signaling a move towards the 18,000 handle. However, overbought conditions suggest a possibility of intensified selling pressure.

Conclusion

As markets await the US Jobs Report and assess economic indicators, the DAX Index remains poised for further movement. With factors such as ECB actions, Fed rate cut expectations, and economic data shaping investor sentiment, the trajectory of the DAX will continue to be closely monitored, with potential implications for global markets.