False Start to December: DAX Slumps – Asian Rate Concerns and Economic Contraction Weigh
The DAX experienced a sharp setback on Monday, starting the new month with a significant loss of over 1 percent. The initial trigger for the sell-off came from Asia: rumors of a potential interest rate hike by the Bank of Japan caused global nervousness. A further negative signal was delivered by the release of the Purchasing Managers' Indices (PMI) for the manufacturing sector in the EU. With the exception of Italy, all major European economies (including Germany) are registering below the 50-point mark, indicating continued contraction in the German economy and dampening hopes for an imminent economic recovery.
ECB in Focus: Eurozone Inflation Rate on the Agenda
For today, Tuesday, the Eurozone consumer prices are on the agenda. This indicator is of particular relevance to the ECB in determining its interest rate strategy, as it ultimately enables the calculation of inflation. Both the Euro and the DAX, as well as all European stock markets, typically react sensitively to these publications.
Among individual stocks, Airbus shares faced an expected thrust reversal after software upgrades on several aircraft models led to significant disruptions in air traffic. The loss totaled 5.9 percent. The day's winner was the Mercedes-Benz Group, which outperformed the DAX with a price gain of 1.6 percent.
DAX Rebounds Off the 100-Day Average – Where Will the Next Impulse Come From?
Technically, the DAX is once again moving away from the important 100-day moving average mark, which it must decisively surpass to establish a new uptrend. The start of December has thus failed initially. Investors are now focusing on the ongoing earnings season in the US. The question remains whether the necessary positive impulses can be generated there to spill over to the German leading index and shift sentiment, or whether the downward movement will persist.
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