The German Greens Party officer Hasselman updated developments on 13 March and reportedly declared no progress in conversations with Conservatives/SPD about debt plans.
Mario Cavaggioni, portfolio manager at Hy Market, noticed:
“The market does not matter, parties involved in heavy conversations before an agreement reaches the most important scenario. Bund tries to break a level of 2.9% again, my goal remains 3%. “
Cavaggioni added to German bond returns:
“I think 3% could be reached in the short term, on a long horizon agree that persistent yields above the actual levels require a GDP growth (which will only happen in 2026 if the tax boost is delivered) and/or inflation -shock background …”
The increasing opposition against the tax package of the coalition government can influence the German listed shares. Sensitive sectors of the tax stimulus plan include construction, defense, energy, telecommunications, IT and technology.
The Bund 10-year proceeds from Germany can be a measure of the tax policy sentiment. The 10-year-old German Bund yield closed the Thursday session at 2.85%.
American markets slide while Trump activates the flight to safety
The Nasdaq Composite Index fell by 1.96% on 13 March, while the Dow and the S&P 500 fell 1.30% and 1.39% respectively. The threat of Trump of 200% rates on EU wines and spirits fed the demand for safe haven and drove gold to a record high of $ 2,989.
Rising bets on a rate reduction in June, after softer producer prices and a higher average unemployed claims of 4 weeks, could not dampen the disadvantage.
Michigan Consumer sentiment to influence the concerns about the recession
Although the tax policy of Germany and the tariff developments dominate market focus, the American consumer sentiment can also influence the risk sentiment on Friday 14 March. Economists expect the Michigan Consumer Sentiment Index from 64.7 in February to 63.1 in March. Weaker sentiment can indicate a withdrawal of consumer expenditure that contributes more than 60% to the US GDP.
However, a stronger sentiment could shift the focus to inflation expectations. Rising inflation expectations may indicate a more ragless rate path, the patting of bets on an acceleration of June Fed. In this scenario, rising loan costs can put pressure on risk provisions.
Outlook in the short term: important drivers
The short -term prospects of the DAX depend on:
- German tax policy: progress: possible progress in tax rule changes and infrastructure financing.
- Trade stresses-the escalation of trade conflicts of USEU and the American China.
- Research by the University of Michigan among consumers – trends in consumer sentiment and inflation expectations.
Potential Dax scenarios:
- Bullish case: the relief of trade tensions, tax stimulus progress and the policy of the central bank of the central bank could drive the DAX to the record high of 23,476.
- Bearish Case: tax stimulus resistance, escalating trade risks or stronger consumer sentiment or inflation expectations can drag the DAX to 22,000.
From Friday morning the Dax -Futures rose with 121 points, while the Nasdaq achieved 100 mini 190 points, which indicates a positive session.
DAX Technical indicators
Daily graph:
Despite the withdrawal of Thursday, the DAX remains above the exponential advancing averages of 50 days and 200 days (EMAs). However, tariff and tax-established volatility suggests potential short-term risks within the wider upward trend.
An outbreak of 22,500 would signal a movement to 22,750. A break above 22,750 can enable the bulls to focus on 23,000.
Conversely, if the Dax breaks under 22,350, the support can test at 22,000 and the 50-day EMA.
With the RSI at 52.48, the Dax is under the overbought levels (above 70), which suggests a space for a climb to its highest peak of 23,476.