DAX Eyes 23,479 as Fed Interest rate decision & Nvidia 2day Quantum Event await

Market Summary – 19 May 2025

Global Markets & Geopolitics

• Asian stocks subdued after Wall Street’s sharp decline, with geopolitical tensions & trade policy concerns dampening sentiment.
• Yen weakened after the Bank of Japan held rates steady, while the euro stayed near a five-month high after Germany’s debt overhaul.
• Russia agreed to halt attacks on Ukraine’s energy infrastructure in a call with US President Trump, though a full ceasefire remains elusive.
• US markets declined ahead of the Federal Reserve’s policy decision, with investors watching for signals on economic projections & rate guidance.
• Gold surged to a record $3,045 per ounce, reflecting safe-haven demand, while oil prices dropped sharply.

European Banks Surge

• European bank stocks and defence stocks outperformed US peers, up 50% in 15 weeks.
• Valuation gap shrinks, with P/E discount reduced to 19%, aligning with historical averages.
• Higher rates & improved growth outlook support gains.

DAX Technical Analysis 1 DAY

The Germany 40 (DAX) CFD daily chart is showing strong bullish momentum, with the price attempting to break past the 23,479 resistance level. The 20 EMA (22,817.8) continues to act as dynamic support, reinforcing the ongoing uptrend.

The RSI at 62 indicates healthy bullish momentum without being overbought, suggesting that there is still room for further upside. Meanwhile, the Stochastic RSI is rising, showing increasing momentum, which could support a breakout above 23,479.

If the price breaks and holds above 23,479, the next upside targets could be 23,600-23,800. However, failure to break resistance could lead to a short-term pullback toward 22,800 (20 EMA) or even 22,121 (50 EMA). Traders should watch for either a confirmed breakout or signs of rejection near current resistance levels.

Turkey – TRY at weakest point on record

• BIST 100 Index plunged -6.9% following the detention of Istanbul Mayor Ekrem Imamoglu on charges including graft and aiding a terrorist group.
• Turkish lira depreciated sharply, falling 10% against the U.S. dollar to 40.5750 at 07:46 GMT.
• Imamoglu, a key opposition leader (CHP), is seen as a major challenger to President Erdogan in upcoming elections.
• CHP denounces the arrest as a "coup attempt against the next president."
• Allegations include leading a crime organization, bribery, and tender rigging, escalating Turkey’s political tensions.
• The move has deepened uncertainty, potentially impacting investor confidence and market stability.

 

Oil Market Faces Oversupply Risks

• IEA warns of a 600K barrels/day surplus in 2025, driven by:
• Weakening global demand amid trade conflicts.
• Record-high US oil production.
• OPEC+ overproduction, which could add another 400K barrels/day if not curbed.
• Oil prices expected to stabilize but may decline further if production cuts are not enforced.

China’s Hang Seng Index Hits 3-Year High

• China’s economy shows signs of strong growth, supported by:
• New stimulus measures targeting domestic consumption.
• $55B in consumer subsidies for durable goods.
• Potential stabilization of real estate prices, crucial as 70% of household wealth is in property & equities.
• Hang Seng Index’s expected corporate earnings growth (4.6% for 2025) may be revised higher.

Lithium Prices Under Pressure

• Lithium prices resumed decline (-3% in China, February), driven by:
• Restart of two major lithium refineries in China.
• Supply glut from a 25% global production increase in 2024.
• Further price recovery unlikely in the near term.

Corporate News

Nvidia’s GTC Conference & Quantum Computing Focus

• First-ever “Quantum Day” highlights Nvidia’s role in quantum computing infrastructure.
• Key session: "Quantum Computing: Where We Are and Where We're Headed", featuring top executives from major quantum firms.
• Quantum computing industry sees growing investment & innovation.

BYD Hits Record High on Battery Breakthrough

• BYD unveiled a five-minute charging EV battery, boosting stock performance.
• Nio & CATL partner on EV battery-swapping stations, aiming for greater efficiency & convenience.

Key Events Today (GMT)

• 13:30 USD – Crude Oil Inventories (Expected: +0.800M | Prev: +1.448M)
• 18:00 USD – FOMC Statement & Fed Interest Rate Decision (Expected: Hold at 4.50%)
• 18:30 USD – FOMC Press Conference
• Earnings: General Mills (Premarket)

Market Outlook

• All eyes on the Federal Reserve, with rate guidance & economic projections key for market sentiment.
• Geopolitical risks persist, with Russia-Ukraine talks & Middle East tensions impacting oil & gold.
• European banks & China’s equity markets show strength, while commodity markets adjust to supply trends.
• Nvidia’s quantum computing announcements could drive tech sector momentum.