DAX Index Forecast After Strong Deutsche Bank Earnings

The DAX index futures declined as the global equities sell-off accelerated. The index declined by 50 points to 15,490 even after the relatively strong quarterly earnings by Deutsche Bank. It is still 3% above the lowest level last week.

Deutsche Bank earnings. Deutsche is the biggest bank in Germany and a pivotal part of the DAX index. In a report published today, the bank said that its profit before tax rose to 1.2 billion euros in the second quarter. Its net income was more than 828 million euros. 

This performance as mostly because of the core bank earnings, which rose by 90%. Its capital release unit reduced its loss to 258 million euros. In total, the company’s revenue rose to more than 6.2 billion euros while its Common Equity Tier 1 (CET1) ratio declined from 13.7% to 13.2%. This figure is still better than the ECB’s preferred ratio of about 10%.

Deutsche Bank also reported strong half-year results. Its revenue rose by 7% to 13.5 billion while its profit before tax came in at 2.8 billion euros. In a statement, the bank’s CEO said:

“Our pre-tax profit of € 1.2 billion in the second quarter demonstrates that we’re well on the path toward our goal for a post-tax RoTE1 of 8% next year. All our businesses have contributed to the year-on-year profit growth.”

Deutsche Bank joins other global banks that are reporting strong results. This month, American giants like Goldman Sachs, JP Morgan, and Citigroup reported strong results. 

DAX Index forecast

The daily chart shows that the DAX index has been in a tight range recently. It is still hovering near its all-time high and is slightly above the 25-day and 50-day moving averages. The Relative Strength Index (RSI) has also formed a bearish divergence pattern. Therefore, while the overall outlook for the index is bullish, we can’t rule out a situation where it goes through a pull-back.

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DAX Chart

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