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DAX and EUR/USD forecast: Lower energy prices, yields offer support

But the question, of course, is how much further oil prices and bond yields can fall. For now, the combination is supportive of risk assets and is helping to sustain a relatively benign decline in the dollar. The focus today will be on US core PCE inflation, due for release shortly, while Nvidia’s second-quarter earnings will provide another test for risk appetite after the US markets close – not just for US indices but for global tech-heavy indices given the influence Nvidia has over the global tech and AI names.

Fawad Razaqzada
Fawad Razaqzada

DAX, FTSE and S&P 500 forecast: Major indices bounce back as risk appetite improves

Investors are also expecting further rate cuts from major central banks, even if there was a bit of hawkish repricing of US interest rates following Powell’s comments at the FOMC presser last week. Still, easing of monetary policy is driving stocks higher, while the recent extension of a trade truce between the US and China means appetite for AI-related stocks remains strong, with earnings also largely being positive this reporting season.