Eurozone Inflation Drops to 4-Month Low as Rate Cut Bets Intensify

Euro Zone inflation dropped to a 4-month low of two.2%, growing bets on an ECB price lower in April.
Uncertainty surrounds the inflation outlook on account of US tariffs and the EU’s response.
The DAX index faces a “precarious scenario” technically, with the potential for a correction forward of tariff bulletins. What’s subsequent for the DAX?

within the Euro Space dropped to 2.2% in March 2025, its lowest stage since November 2024 and slightly below the anticipated 2.3%, based on early estimates.

Costs for providers grew extra slowly (3.4% in comparison with 3.7% in February), and power prices fell (-0.7% in comparison with a 0.2% rise earlier than). Nonetheless, inflation stayed the identical for non-energy items (0.6%) and processed meals, alcohol, and tobacco (2.6%), whereas unprocessed meals costs jumped considerably (4.1% in comparison with 3.0%).

, which excludes meals and power, additionally eased to 2.4%, barely under the two.5% forecast and its lowest since January 2022. Month-over-month, elevated by 0.6% in March, up from a 0.4% rise in February.

Inflation Outlook Transferring Ahead

The short-term outlook for inflation is very unsure. US tariffs might decrease eurozone inflation by decreasing exports and slowing financial development. These tariffs additionally improve the availability of products within the eurozone because the US makes it more durable to entry their market. Nonetheless, if the European Fee retaliates, it might push larger since these measures act like a home tax that buyers will partly bear.

Final 12 months in March, ECB President Lagarde hinted at potential price cuts, saying, “We’ll know a little bit extra in April and much more in June.” This 12 months, by April, she’ll have far more readability on US tariffs on European items and the EU’s deliberate response, which shall be mentioned on the April ECB assembly. It will play an enormous position in deciding future rates of interest.

One concern is that the job market remains to be very tight, with hitting a file low of 6.1% in February, based on Eurostat information launched on Tuesday. For now, in the present day’s lower-than-expected inflation helps the case for one more price lower to convey charges nearer to impartial.

Markets are actually pricing in round an 82% probability of a 25 bps price lower on the ECB assembly on April 17.

ECB Curiosity Charge Expectations

Supply: LSEG0

Technical Evaluation – DAX Index (DAX 40)

from a technical standpoint, the index has loved a stellar 2025 YTD.

Nonetheless, current technicals have instructed {that a} potential correction could also be within the offing with a possible double high sample forming at current highs. A break of the neckline has but to materialize nonetheless, and in the present day’s weaker inflation information has helped with that.

Nonetheless, a day by day candle shut under the 22405 deal with (neckline) might result in an accelerated selloff within the DAX simply as President Trump prepares his tariff bulletins.

This leaves the DAX in a precarious scenario at current, with fast resistance resting at 22886, 23200 and naturally the current highs at 23454.

Instant assist rests at 22405, 21758 earlier than the 200-day MA comes into focus at 21164.