Commerzbank extended its gains from Wednesday, rising by 70% after better-than-expected profits, while Deutsche Bank declined by 1.25%.
China and Eurozone Inflation in Focus
Economic data from China will likely set the tone for the Friday session. Weaker-than-expected retail sales figures overshadowed an upswing in industrial production, testing buyer demand for riskier assets.
Industrial production increased 6.7% year-on-year in April after advancing 4.5% in March. However, retail sales were up 2.3% year-on-year versus 3.1% in March.
While the numbers from China will set the tone, finalized Eurozone inflation numbers also warrant investor attention.
According to preliminary numbers, the annual inflation rate remained at 2.4% in April, unchanged from March. Revisions to the preliminary figures could influence sentiment toward the ECB rate path. A downward revision could boost buyer demand for DAX-listed stocks.
Beyond the numbers, investors should continue tracking ECB commentary. ECB Executive Board member Luis de Guindos is on the calendar to speak on Friday. Views on the ECB rate path beyond June would need consideration.
US Economic Calendar: The Fed in Focus
Later in the Friday session, FOMC member chatter could influence market risk sentiment. After calls for a higher-for-longer Fed rate path on Thursday, FOMC member Christopher Waller is on the calendar to speak.
Views on inflation, the labor market, and the Fed rate path will garner investor interest. Before the April reports, Christopher Waller favored a higher-for-longer Fed rate path. A deviation from his previous view could move the dial.
Near-Term Outlook
Near-term trends for the DAX will hinge on inflation numbers for the Eurozone and central bank commentary. Softer-than-preliminary inflation numbers for the Eurozone and support for post-June ECB rate cuts could drive buyer demand for DAX-listed stocks. However, hawkish FOMC member chatter could test market risk sentiment.
On the Futures markets, the DAX and the Nasdaq mini were down 48 and 3 points, respectively.
DAX Technical Indicators
Daily Chart
The DAX sat comfortably above the 50-day and 200-day EMAs, affirming the bullish price signals.
A DAX breakout from the Wednesday (May 15) all-time high of 18,893 could give the bulls a run at 20,000.
Eurozone inflation numbers and central bank commentary need investor consideration.
However, a break below 18,750 could signal a DAX fall toward the 18,500 handle.
The 14-day RSI at 64.30 indicates a return to the Wednesday all-time high of 18,893 before entering overbought territory.
