Snapshot: The DAX is trading down 0.88% at 24676, extending yesterday’s losses. Defence stocks are leading the retreat following news of Germany’s revised warship procurement plans, a significant domestic catalyst. We await the IFO Business Climate and ZEW Expectations data for further insight into the German economic outlook.
- The defence sector weakness, particularly Rheinmetall’s sharp decline, is the dominant domestic driver.
- Watch for any spillover from the US 08:30 ET macro data, particularly any signs of inflation persistence that could firm US yields and weigh on European equities.
Bias into NY: The immediate bias remains cautious, with domestic defence sector weakness acting as a clear headwind. While a rebound in chipmakers like Infineon offers some support, the broader sentiment is tilted lower, especially if US yields continue their upward trajectory.