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DAX rises with EU-US trade talks in focus

• EU-US trade talks optimism lifts DAX
• German ZEW economic sentiment data due
• DAX trades just below record high

The DAX, along with European shares, is edging higher, driven by the auto sector amid improving sentiment after President Trump signalled it was prepared to negotiate on tariffs with the EU.

Over the weekend, President Trump threatened a 30% tariff on most EU imports from August 1st if a trade deal was not agreed beforehand. Trump has said that he is open to talks with the EU and other trading partners. The EU has threatened with countermeasures if no agreement is reached.

Mercedes-Benz group is trading 1.1% higher, whilst BMW, Porsche, and Volkswagen are all posting gains.

German banks are also advancing ahead of earnings from the US later today. Deutsche Bank is up over 1%. U.S. banks JP Morgan, Wells Fargo, and Citigroup are due to report today.

While on the data front, Attention will be on ZEW economic sentiment, which is expected to improve further, rising from 47.5 to 50 in July. Eurozone industrial production will also be in focus and is expected to recover to 0.9% month on month in May, up from a 2.4% contraction.

Later in the session, attention will be on US inflation figures, which are expected to rise to 2.7% up from 2.4%. Hotter inflation could drive a more hawkish Fed policy stance, impacting risk assets such as the DAX.
 

DAX forecast – technical analysis

The DAX ran into resistance at 24,635 and has eased lower, falling below the rising trend line that dates back to the April low, before finding support at 24k. The long lower wick on yesterday’s candles suggests there was little selling demand at the lower levels.

Buyers will look to rise back above the rising trendline resistance and towards 24,635 for fresh record highs.

Sellers will need to take out 24,000 and 23,800, the confluence of the 20 and 50 SMA, for a deeper selloff to 23,350. It will take a break below 23,000 to create a lower low.

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FTSE rises above 9000 after strong Chinese data & GBP weakness

• Chinese GDP  rose 5.2% annualized, but miners are unchanged
• Weak GBP helps to support the FTSE
• FTSE rises above 9000

The FTSE 100 hovers near the record high of 9000 on Tuesday, as a weak pound and gains in Experian are offset by weakness in housebuilders. Chinese GDP data failed to spark a rise in miners.

Chinese GDP came in stronger than expected, recording growth of 5.2% annualised in the second quarter as the world's largest exporter shrugs off the impact of Trump's trade war. The rate was slightly ahead of the 5.1% forecast and positions Beijing on track to hit its full-year target of 5%. The data suggests that China has been able to keep growth on track through exports and investments even as it struggles with weak demand at home. Miners were broadly unchanged, except Glencore, which was up 1%.

Meanwhile, weakness in the pound is keeping the international FTSE 100 supported. A weak pound is beneficial for the international firms listed on the index, which benefit from the improved exchange rate. The pound is under pressure after Bank of England governor Andrew Bailey warned that the central bank may need to cut rates more aggressively if the weakness in the jobs market accelerates. UK unemployment figures are due on Thursday.

Credit data firm Experian jumped 5% after posting better-than-expected revenue of 8% in Q2, fueled by a strong increase in its North American business.

Barratt Redrow Shares slump sharply after the housebuilder said it expected to deliver full-year 2025 profit in line with market expectations; however, its 2026 guidance and reported home completions fell short of expectations amid affordability concerns, sending the share price 8% lower.
 

FTSE forecast - technical analysis

The FTSE 100 has extended its recovery from the April lows, rising above 9000 to a record high of 9043. Buyers, supported by momentum, will look to extend gains, with blue skies above 9100 being the next logical level.

Support can be seen at the 8900 support zone. It would take a break below 8760 to create a lower low.

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