- Euro Zone inflation dropped to a 4-month low of two.2%, rising bets on an ECB fee reduce in April.
- Uncertainty surrounds the inflation outlook resulting from US tariffs and the EU’s response.
- The DAX index faces a “precarious scenario” technically, with the potential for a correction forward of tariff bulletins. What’s subsequent for the DAX?
within the Euro Space dropped to 2.2% in March 2025, its lowest stage since November 2024 and slightly below the anticipated 2.3%, in accordance with early estimates.
Costs for providers grew extra slowly (3.4% in comparison with 3.7% in February), and power prices fell (-0.7% in comparison with a 0.2% rise earlier than). Nevertheless, inflation stayed the identical for non-energy items (0.6%) and processed meals, alcohol, and tobacco (2.6%), whereas unprocessed meals costs jumped considerably (4.1% in comparison with 3.0%).
, which excludes meals and power, additionally eased to 2.4%, barely under the two.5% forecast and its lowest since January 2022. Month-over-month, elevated by 0.6% in March, up from a 0.4% rise in February.
Inflation Outlook Transferring Ahead
The short-term outlook for inflation is extremely unsure. US tariffs may decrease eurozone inflation by decreasing exports and slowing financial development. These tariffs additionally improve the availability of products within the eurozone because the US makes it tougher to entry their market. Nevertheless, if the European Fee retaliates, it may push larger since these measures act like a home tax that customers will partly bear.
Final 12 months in March, ECB President Lagarde hinted at potential fee cuts, saying, “We’ll know slightly extra in April and much more in June.” This 12 months, by April, she’ll have far more readability on US tariffs on European items and the EU’s deliberate response, which will likely be mentioned on the April ECB assembly. This can play an enormous position in deciding future rates of interest.
One concern is that the job market remains to be very tight, with hitting a report low of 6.1% in February, in accordance with Eurostat information launched on Tuesday. For now, at the moment’s lower-than-expected inflation helps the case for an additional fee reduce to deliver charges nearer to impartial.
Markets are actually pricing in round an 82% probability of a 25 bps fee reduce on the ECB assembly on April 17.
ECB Curiosity Price Expectations
Supply: LSEG0
Technical Evaluation – DAX Index (DAX 40)
Taking a look at from a technical standpoint, the index has loved a stellar 2025 YTD.
Nevertheless, latest technicals have urged {that a} potential correction could also be within the offing with a possible double prime sample forming at latest highs. A break of the neckline has but to materialize nonetheless, and at the moment’s weaker inflation information has helped with that.
Nevertheless, a day by day candle shut under the 22405 deal with (neckline) may result in an accelerated selloff within the DAX simply as President Trump prepares his tariff bulletins.
This leaves the DAX in a precarious scenario at current, with speedy resistance resting at 22886, 23200 and naturally the latest highs at 23454.
Quick help rests at 22405, 21758 earlier than the 200-day MA comes into focus at 21164.
DAX 40 Day by day Chart, April 1, 2025
Supply: TradingView.com
Assist
Resistance
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