Snapshot: The DAX 40 is consolidating just below the 25,000 handle, paring early gains as a 4% ex-dividend drop in Volkswagen offsets a strong bid in defense names like Rheinmetall (+1.6%). Underpinning the medium-term picture is Eurozone HICP comfortably at the ECB’s 2.0% target and target upgrades from Goldman Sachs and Barclays. This domestic disinflation story continues to anchor German equities, despite a quiet session for ECB speakers today.
- The 25,000 level is the immediate line in the sand; a clean daily close above this structural barrier opens the path to fresh record highs, backed by Germany’s HICP print down to 2% from its prior 2.6%.
- US macro spillovers ahead of the NY open, specifically the 2Y Treasury yield backing up 15bp to 4.2% and the VIX rising 12% to 18.44, could spark some late-session profit taking if US cash equities open soft.
Bias into NY: We hold a constructive bias, targeting 25,150 with support solid down to 24,800. The Eurozone’s supportive disinflation backdrop and positive strategist revisions should keep the index insulated from rising US real yields.