DAX 40

Key insight

The US pause in strikes on Iran is the single biggest near-term catalyst: falling oil prices directly compress European input costs and remove the key headwind that prevented the DAX from sustaining its July 6 record high of 25,900.10 — a re-test of that level is now squarely in play.

The DAX has rebounded sharply from its ~24,830 July-20 lows to 25,465, reclaiming the key 25,400 resistance-turned-support level as US-Iran de-escalation and a drop in Brent crude from $100 to $86 lift risk appetite into a massive earnings week.

Main risk

ECB rate hike signal — Kazimir warns of further tightening

ECB policymaker Kazimir stated on July 27 that at least one more rate hike will be needed, complicating the easing narrative that underpinned the DAX's H1 bull run; a hawkish September ECB meeting could push the deposit rate above 4% and pressure German equity valuations.