Snapshot: The DAX 40 is consolidating just below the landmark 25,000 level, pausing after a six-session rally as Volkswagen’s 4% ex-dividend drop temporarily anchors the index. The structural backdrop remains highly supportive with German HICP normalized at 2.0%, giving the ECB clear runway to ease, amplified by Goldman and Barclays raising their European equity targets this morning. Today’s quiet European macro calendar leaves the focus on central bank rhetoric following morning fireside chats from the ECB’s Elderson and Cipollone.
- Solid technical support at 24,850 should limit downside, particularly as automaker shares find a floor on reports of impending EU tariffs on Chinese plug-in hybrids.
- Geopolitical friction in the Middle East and a rise in the VIX to 18.44 present risk-off headwinds ahead of the NY open, which could intensify if US data at 08:30 ET triggers another backup in Treasury yields.
Bias into NY: We hold a structural bullish bias targeting a clean break above 25,100, as normalized Eurozone inflation outweighs temporary ex-dividend drags, though rising US 10Y yields at 4.49% may cap immediate upside.