Auto stocks extended the gains from the Monday session. Volkswagen gained 1.61%, with BMW and Mercedes Benz Group advancing by 1.08% and 1.08%, respectively. Porsche ended the session up 0.25%.

German Producer Prices, Eurozone Consumer Confidence, and the ECB

On Wednesday, German producer prices will draw investor interest early in the European session. Economists forecast producer prices to decline by 3.8% year-on-year in February after falling 4.4% in January.

However, economists expect producer prices to fall by 0.1% month-on-month after rising by 0.2% in January. A fall in producer prices would signal a weak demand environment and support bets on a June ECB rate cut. Bets on an H1 2024 ECB rate cut remains a tailwind for the DAX.

Later in the session, Eurozone consumer confidence numbers also need consideration. Economists expect the Consumer Confidence Index to increase from -15.5 to -15.0. However, barring a marked increase in the Consumer Confidence Index, the numbers are unlikely to influence sentiment toward an H1 2024 ECB rate cut.

Away from the numbers, ECB President Christine Lagarde and Chief Economist Philip Lane are on the calendar to speak.

Views on the economic outlook, inflation, and the timeline for interest rate cuts could move the dial.

There are no economic indicators from the US to consider. However, investors will be mindful of the FOMC interest rate decision, projections, and press conference after the European closing bell.

Short-term Forecast

Near-term trends for the DAX will hinge on inflation and wage growth trends for the euro area and the Fed interest rate decision.

Sticky inflation, upward trends in euro area wage growth, and a hawkish Fed could test buyer demand for DAX-listed stocks.

In the futures, the DAX and Nasdaq mini were down 22 and 25 points, respectively.

DAX Technical Indicators

Daily Chart

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

A DAX return to the March 14 all-time high of 18,039 could give the bulls a run at the 18,200 level.

Euro area economic indicators and ECB chatter warrant investor attention.

Conversely, a drop below the 17,900 handle could signal a fall to the 17,750 handle.

The 14-day RSI at 76.17 shows the DAX in overbought territory. Selling pressure may intensify at the March 14 high of 18,039.