Rising bets on H1 2024 ECB and Fed rate cuts supported tech stocks. Infineon Technologies and SAP gained 3.07% and 1.43%, respectively.

Bank stocks also contributed to the gains. Commerzbank and Deutsche Bank advanced by 3.27% and 1.19%, respectively. Investors ignored news of Moody’s downgrading its outlook for German banks from stable to negative.

However, auto stocks had a negative session. Porsche declined by 1.24%. BMW and Mercedes-Benz Group ended the session down 0.69% and 0.62%, respectively. Volkswagen slipped by 0.21%. Downward ECB Staff revisions to growth forecasts likely influenced the buyer appetite for auto stocks.

German Industrial Production and Producer Prices

On Friday, German industrial production and producer prices will garner investor attention. An unexpected fall in producer prices could support bets on a June ECB rate cut. Economists forecast producer prices to increase by 0.2% in January after falling 1.2% in December.

After a 12.0% surge in factory orders in December, economists expect industrial production to rise by 0.6%. Another decline in industrial production would support expectations of a Q1 2024 German recession.

Eurozone GDP and employment change numbers for Q4 also need consideration. Revisions to preliminary figures influence market risk sentiment but are unlikely to impact market bets on a June ECB rate cut. According to 2d estimates, the Eurozone economy stalled in Q4, while employment increased by 0.3%.

While the euro area stats will draw interest, the US economic calendar will likely have more impact.

US Economic Calendar: The US Jobs Report

On Friday, the US Jobs will warrant investor attention. Weaker-than-expected labor market data would support bets on an H1 2024 Fed rate cut. Nonfarm payrolls and the unemployment rate are the focal points. However, investors must consider wage growth.

Economists forecast US nonfarm payrolls to increase by 200k in February and a steady unemployment rate of 3.7%. However, economists expect average hourly earnings to soften from 4.5% (January) to 4.4% year-on-year in February.

Beyond the numbers, investors must also consider Fed reactions to the US Jobs Report.

Short-term Forecast

Near-term trends for the DAX will likely hinge on the US Jobs Report and central bank chatter. Expectations of H1 2024 ECB and Fed rate cuts remain a tailwind. However, signals of a US hard landing could impact market risk sentiment.

On Thursday, the DAX futures were up 31 while the Nasdaq mini was down 31 points.

DAX Technical Indicators

Daily Chart

The DAX remained well above the 50-day and 200-day EMAs, affirming bullish price signals.

A DAX break above the Thursday all-time high of 17,879 would bring the 18,000 handle into play.

Euro area economic indicators and the US Jobs Report need consideration.

A break below the 17,750 handle would bring the 17,600 handle into play.

The 14-day RSI at 79.45 shows the DAX in overbought territory. Selling pressure could intensify at the ATH of 17,879.