US Economy, Fed Outlook & Market Moves | DAX Technical Analysis

US Economy & Fed Outlook

• Jobs data focus: Friday’s employment report is key for the Fed, with expectations of modest payroll gains and a 4.3% unemployment rate.
• Shutdown risk: A potential US government shutdown could delay payrolls data, forcing the Fed to rely on private surveys before its October meeting.
• Policy expectations: Markets price a 90% chance of an October rate cut and a two-thirds chance of another in December, but strong data could temper easing.
• Recent data impact: Stronger-than-expected GDP (+3.8% annualized in Q2), durable goods orders, and falling jobless claims reduced expectations for aggressive cuts.

Markets & Valuations

• Equities: The S&P 500 trades at 22.8x forward earnings, close to a 5-year high, leaving valuations stretched.
• Asia: Chinese and South Korean equities gained, while Japan’s Nikkei fell after a strong September.
• UK: The FTSE 100 held firm despite tariff risks and pharma weakness; travel & leisure supported gains.
• Pharma stocks: AstraZeneca and GSK pressured lower on US tariff proposals targeting branded drugs.
• Gilts & FX: UK gilt yields rose amid weak auctions and fiscal concerns; the pound fell sharply to $1.3355.

Commodities & FX

• Gold: Hit a record above $3,800/oz, supported by shutdown fears, geopolitical tensions, and dollar softness.
• Oil: Prices eased on rising supply.
• Copper: Prices surged to ~$10,360/t after Indonesia’s Grasberg mine halted operations due to a natural disaster, with output shortfalls expected through 2026.
• Crypto: Bitcoin dropped below $109,000, erasing $170bn from crypto markets.
• Treasuries: Gained as investors sought safety.

Global Central Banks

• PCE Core Inflation: August +0.2% m/m and +2.9% y/y, in line with consensus, keeping Fed on track but not altering expectations.
• Switzerland (SNB): Maintained 0% policy rate and FX intervention stance. Inflation remains subdued (0.2% in August). GDP slowed to +0.5% in Q2, with outlook capped by weak exports and tariffs. Growth projected at 1–1.5% in 2025, <1% in 2026, with rising unemployment.

Sector & Country Developments

• India – IT under pressure:
  • H-1B visa fees hiked from ~$5,000 to $100,000.
  • New US proposals to tax outsourced services at 25% and remove tax deductibility threaten profits.
  • MSCI India IT Index fell over 3% on Monday.
• US agriculture: Soybean farmers hit as China halts purchases amid tariff tensions.
• Corporate: EA reportedly near a $50bn go-private deal (WSJ).
• Apple supply chain: Chinese factory workers face harsh conditions rushing to produce iPhone 17s (China Labour Watch).

Political & Policy Headlines

• US shutdown negotiations: President Trump to meet congressional leaders; warned that without a deal, “the country closes.”
• Tariffs: US tariff risks weighing on global growth; pressure particularly on pharma and Swiss exporters.

Key Events This Week

• RBA rate decision
• US JOLTS job openings
• US Non-farm payrolls (Friday)
• Speeches: President Trump (20:15), FOMC’s Williams (20:30)

DAX Technical Analysis 4 hours

Looking at the Germany 40 CFD on the 4H timeframe, price action shows a recovery from early September lows near 23,200, with a rising trendline offering short-term support. The recent bounce has pushed price back toward the 23,800 zone, where it briefly pierced the upper Bollinger Band before easing slightly. This suggests near-term overextension, but the overall structure points to a gradual shift from a sideways consolidation into a potential uptrend. RSI at ~58 remains supportive without being overbought, while the MACD has crossed into positive territory, reinforcing bullish momentum.

Key levels are clear: immediate support sits around 23,500 and again near the rising trendline (~23,300), while resistance lies overhead near 24,000–24,100 and more prominently at 24,650. As long as the price holds above the rising trendline, bulls maintain the advantage, with further upside possible on a clean break above 24,000. However, a failure to hold above 23,500 could risk dragging the index back toward 23,200, neutralizing the emerging bullish case.