DAX Index: Eyes on German Employment Figures and US Data

Highlights:

• The DAX closed at 16,769, up 0.11% on Tuesday.
• On Wednesday, the German unemployment figures will be of interest to investors.
• However, the JOLTs report from the US and the ISM Manufacturing PMI survey from the US will also be worth watching.

DAX 030124 Daily Chart

The DAX gained 0.11% on Tuesday. After rising 0.30% on Friday, the DAX closed Tuesday’s session at 16,769.

Tuesday’s focus was on the Euro-Zone manufacturing sector. Upward revisions to preliminary survey-based results did not provide much comfort. The manufacturing sector increased the likelihood that the Eurozone will enter a recession in Q4 2023. In December, the German manufacturing PMI rose from 42.6 to 43.3. The Eurozone manufacturing PMI rose from 44.2 to 44.4. A reading below 50 indicates contraction in the sector.

Early support came from China’s Caixin Manufacturing PMI, which was better than expected. However, China’s NBS manufacturing PMI over the weekend was a shock. The NBS Manufacturing PMI fell from 49.4 to 49.0 in the month of December. Meanwhile, Caixin’s manufacturing PMIs increased to 50.8.

Late support came from the US manufacturing PMI numbers for December. US 10-year Treasury yields pulled back from session highs as the US manufacturing sector contracted more sharply.

Despite this, the U.S. equity markets had a mixed session. The Dow gained 0.07% on Tuesday. On the other hand, the S&P 500 and the Nasdaq Composite Index fell by 0.57% and 1.63%, respectively.

Near-term trends for the DAX will depend on services PMIs, Eurozone inflation and the US jobs report. Buyer demand for DAX-listed stocks may be driven by rising bets on ECB and Fed rate cuts, but expectations of a mild Eurozone recession.