ECB expected to cut interest rates with potential impact on DAX index

From FX Empire: 2024-06-05 23:38:00

On Wednesday, the 10-year US Treasury yields dropped to 4.277%. The Dow rose by 0.25%, while the Nasdaq and S&P 500 surged by 1.18% and 1.96%. Tech stocks led the rally amid expectations of a September Fed rate cut.

German factory orders and Eurozone retail sales data are set to be released on Thursday. Economists expect a rise in both indicators, which could impact the ECB’s interest rate decision and future guidance.

The ECB is expected to cut interest rates by 25 basis points on Thursday. ECB President Lagarde’s comments during the press conference could influence market sentiment, particularly if multiple rate cuts in 2024 are not hinted at.

US initial jobless claims data for the week ending June 1 will also be released on Thursday. A larger-than-expected increase in jobless claims could fuel speculation of a Fed rate cut in September.

The near-term outlook for the DAX will be influenced by the ECB decision, US job reports, and technical indicators. A hawkish ECB rate cut and softer US labor market data could boost risk appetite.

The DAX remains bullish, sitting above the 50-day and 200-day EMAs. A move to the 18,650 level could push it towards 18,800, but a drop below the 50-day EMA may signal a decline to 18,200. Considerations include economic data and ECB outcomes.



Read more at FX Empire: DAX Index Today: The ECB Interest Rate Decision, the Press Conference, and 18,800