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Flash private sector PMIs on Wednesday, April 23, will likely reflect the early effects of US tariffs on economic conditions. Economists expect Germany\u2019s HCOB Services PMI to fall from 50.9 in March to 50.2 in April. The Manufacturing PMI is forecast to drop from 48.3 to 47.6.<\/p>\n
Weaker-than-expected PMIs could fuel recession fears, supporting multiple ECB rate cuts, though demand for risk assets may hinge on investor sentiment.<\/p>\n
US equity markets<\/a> rebounded on Tuesday, April 22, after President Trump softened his tone on China tariffs. The Nasdaq Composite<\/a> Index jumped 2.71%, while the Dow<\/a> and the S&P 500<\/a> rallied 2.66% and 2.51%, respectively.<\/p>\n A potential thaw in US-China trade relations buoyed market sentiment and hinted at a broader shift in the White House\u2019s approach. Trump also moved to ease concerns over Fed independence.<\/p>\n The Kobeissi Letter commented on the overnight developments, stating:<\/p>\n \u201cTrump is now claiming that tariffs on China will come down from 145%. It seems like tariffs are set to come down and Powell is staying (for now).\u201d<\/p>\n<\/blockquote>\n While stating that tariffs will drop, Trump reportedly clarified that tariffs won\u2019t drop to zero but will be significantly lower, setting a positive tone for the April 23 European session.<\/p>\n On Wednesday, April 23, US private sector PMIs will give insights into the US economy. Economists expect the crucial S&P Global Services PMI to drop to 52.8 in April, down from 54.4 in March. A sharper drop could renew concerns over slowing growth and weigh on equities.<\/p>\n Conversely, an unexpected pickup in service sector activity may ease recessionary fears, bolstering risk sentiment.<\/p>\n Ongoing trade developments will also remain in focus\u2014de-escalation may counterbalance weak PMI data, while new tensions could pressure German stocks.<\/p>\n The DAX\u2019s near-term trajectory will depend on private sector PMIs, central bank guidance, and tariff-related headlines.<\/p>\n Potential DAX Scenarios:<\/p>\n As of Wednesday morning, the DAX futures were up 516 points, while the Nasdaq 100 mini gained 335 points, indicating a breakout start to the session.<\/p>\n\n
US Private Sector PMIs, the Fed, and Trump in Focus<\/h2>\n
Near-Term Outlook: DAX Sensitivity to Macro Risks<\/h2>\n
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Technical Warning Signs Flash<\/h2>\n
Daily Chart:<\/h2>\n