The DAX continues to hang around the 26,000 level, and at this point in time, we are still trying to figure out where to head next.
DAX
The German index has fallen slightly during the trading session here on Monday, but keep in mind Monday might have been a little thin just due to the fact that the Americans aren't trading this index. So, there are some larger banks out there, perhaps on the sidelines.
That being said, we find ourselves hanging around the 26,000 level. The ECB is a potential headwind, as it is expected to tighten. The markets expect a 25-basis-point rate hike this week, taking rates upwards, and another hike is possible later this year.
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Oil continues to be an inflationary problem, and inflation, of course, keeps rates elevated. This is a problem, as oil markets continue to deal with uncertainty.
Semiconductor enthusiasm continues to be strong globally
German political uncertainty, with the AfD securing approximately 44% in the Saxony-Anhalt state election, increases political pressure on Chancellor Merz's government. This is going to be a factor going forward and will be a moving piece of the puzzle.
Semiconductor enthusiasm continues to be strong globally, which is helping some euro-region tech names. So that is one thing that's working in its favor. This continues to be something that I will be watching in general.
Regardless, we're in an uptrend. We're sitting just above the 50-day EMA, and that suggests that we're still somewhat in a buy-the-dip type of situation. This remains my take overall, and I think that we are still bullish on this index.
But at the same time, it's worth noting that markets are pausing a bit, as we have the ECB, the Federal Reserve, and the Bank of Japan all in the next seven or eight days with interest rate decisions.
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