DBG Markets: Market Report for Sep 12, 2025

ECB Holds Rates Unchanged; DAX and Euro Stoxx Await Breakout

The European Central Bank (ECB) left policy rates unchanged at its September meeting, keeping the deposit rate at 2.00%, in line with expectations. While the rate hold itself was widely priced in, the focus was on the forward guidance and policy tone.

ECB Stance Remain Mixed

The ECB highlighted that the eurozone economy has shown greater resilience than expected. Growth forecasts were revised higher, with 2025 GDP now expected at 1.2% versus 0.9% previously. Inflation, meanwhile, was projected to ease gradually: 2.1% in 2025, 1.7% in 2026, and about 1.9% in 2027. While inflation is moving closer to target, it remains slightly sticky.

Policy guidance emphasized a “meeting-by-meeting” and “data-dependent” approach, avoiding any commitment to a preset rate path. Markets, which had once priced in the possibility of two or more cuts this cycle, have now significantly pared back expectations.

Current sentiment points to at most one rate cut this cycle, and even that probability has dropped sharply compared to earlier in the year.

European Equities Stay Range-Bound

Despite the ECBs acknowledgement of resilience, recent eurozone economic data still suggests slow growth momentum. Against the backdrop of unchanged rates and adjusted forecasts, European equity indices have held near their highs but remain range-bound, as cautious sentiment caps further upside.

Overall, expectations for ECB easing have cooled significantly. Future policy moves will hinge on incoming inflation and growth data. If resilience continues, markets may further reduce their pricing for additional cuts.

DAX & Euro Stoxx 50: Holding Highs, Awaiting Breakout？

DAX (DE40) Outlook

The German DAX index continues to trade near record territory, supported by stronger-than-expected corporate earnings earlier in the quarter and the ECBs confirmation of eurozone resilience.

However, upside momentum has started to fade as German macro data remains mixed—weak industrial output is offset by modest strength in services, keeping investors cautious.

DE40, Daily Chart

Technically, the DAX is hovering just below its all-time high at 24,555, consolidating in a tight range for nearly three months. This prolonged sideways action suggests that investors are waiting for a clear catalyst before committing to the next leg.

A decisive breakout above 24,555 could open the way for a renewed bull run, while a failure to sustain momentum risks a bearish reversal from these elevated levels.

Euro Stoxx 50 (EU50) Outlook

The Euro Stoxx 50 is also trading near multi-year highs, but recent price action shows clear signs of fatigue as investors remain wary ahead of fresh macroeconomic data. The ECBs cautious stance—holding rates steady while acknowledging economic resilience—has kept sentiment balanced, but not strong enough to fuel a decisive push higher.

EU50, Daily Chart

For now, the index remains trapped in a consolidation phase. Market participants are closely watching incoming eurozone inflation data and ECB commentary for clues.

Awaits Catalyst to Emerge

Both indices are consolidating near record highs, reflecting an environment where investors remain optimistic but cautious. The market is clearly waiting for stronger conviction before committing to the next move.

While upcoming ECB signals and eurozone economic data could provide the needed trigger, the broader landscape—including the Federal Reserves policy outlook—should not be overlooked as another potential catalyst that could sway sentiment and direction.