The German DAX Index wavered near its all-time high, mirroring the performance of most global indices. It ended the week at €24,290, a few points below the year-to-date high of €24,635. This price is about 33% above its lowest point in April. Here are the top catalysts for the index this week.
European Central Bank (ECB) decision
A key catalyst for the German DAX will be the European Central Bank’s decision on Thursday. Economists expect the bank to leave interest rates unchanged at 2.15%. This will be the first time that it has left them intact for so long.
The decision to leave rates unchanged will not necessarily move the DAX and other European indices. Instead, what will move these indices will be the guidance on what to expect later this year. Signs that the bank will cut rates will be bullish to the DAX Index as analysts expect it to leave rates unchanged.
Top German corporate earnings
The other key catalyst for the DAX Index will be reports by many of its constituent companies. The most important one will be SAP, the biggest constituent company that will publish its results on July 22.
Its results are notable because it is one of the biggest European companies and is also a major competitor to American giants like Amazon and Microsoft.
READ MORE: Here’s why SAP share price may crash to €208 soon
Another notable company to watch is Deutsche Bank, the country’s largest bank. Its results will come at a time when its stock is in a strong uptend, mirroring the performance of other European banks.
The other DAX Index companies that will publish their earnings are Deutsche Börse, Satorius, MTU Aero Engines, and Volkswagen. VW is also notable as its results will provide more information on the impact of Donald Trump’s tariffs on German automobiles.
The DAX Index will also react to companies by some of the biggest American companies like Microsoft and Tesla. While these are all American firms, they consistently have a significant impact on global indices.
The DAX will also be influenced by reports from some of the other major European companies, such as LVMH, BNP Paribas, and Thales.
US and European trade talks
The other most notable catalyst for the DAX Index is the ongoing trade talks between the US and the European Union as the August 1st deadline nears.
Recent reporting by the FT shows that the two sides are still in talks, with the US pushing for a minimum tariff of between 15% and 20% on European goods. That baseline is much higher than the minimum 10% tariff that the US reached with the UK.
Trump has consistently criticized the European Union and its substantial $231 billion trade surplus with the US. He has always complained that the EU sells so much to the US without buying US-made cars and agricultural products.
The EU has offered a zero-to-zero tariff with the US, which Trump rejects because of the other non-tariff barriers. A trade deal with the EU will boost the DAX Index.
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