Middle East tensions are putting fresh pressure on European risk sentiment
The DAX is set to open below the 23,800 level after another uneasy weekend in the Middle East. Investors are still dealing with an unstable geopolitical backdrop, and the lack of any visible de-escalation is keeping risk appetite fragile across European equities.
The immediate market channel is oil. Fresh military incidents around the Strait of Hormuz and Abu Dhabi have pushed crude prices higher again, which is adding another inflationary strain just as equity investors were hoping for a calmer start to the week.
Weak Chinese data are reinforcing the global slowdown story
The growth backdrop has also deteriorated. In Asia, technology shares remained under pressure and investors kept taking profits across several sectors, while the latest Chinese macro data missed expectations. Industrial production rose only 4.1%, well below the expected 6%, and retail sales increased just 0.2% against a 2% consensus forecast.
That combination strengthens the view that the world economy is losing momentum. Supply-chain disruption and higher energy costs are increasingly feeding into a broader stagnation narrative, which is especially uncomfortable for a DAX already exposed to cyclical and export-driven sectors.
Nvidia earnings are the main event in an otherwise thin week
There are few obvious macro catalysts on the calendar this week, which means stock-specific risk may matter even more than usual. The biggest scheduled event is Nvidia's earnings release after the New York close on Wednesday, which could inject fresh volatility into technology sentiment and spill back into Europe.
