The estimate is for the headline PMI reading to drop to 52.3, down from 52.6 in November. That will point to a further moderation in business activity to round up the year, as reflected in the S&P Global PMI report yesterday here. If the ISM print matches the estimate, that will be the softest reading since September last year.Now, overall activity is still expected to remain in expansion territory. So, the reading is not going to point to major trouble but just some moderation in the growth momentum.Looking at yesterday’s report by S&P Global, there are a couple of key downside points to note. For one, new orders were especially weak as new business placed at services providers showed the smallest rise in some 20 months. That points to some softening in demand conditions and one that could extend into the new year.The other key point is that employment conditions stagnated on the month, failing to rise for the first time since February. S&P Global noted that the fall is negligible but it does put an end to a nine-month sequence of continuous growth. Of note, cost concerns, budget constraints and the downturn in demand growth were cited as reasons for the lackluster trend in employment.So, those are some things to watch out for when we get to the ISM report later.Besides that, one of the more focal points will be the prices paid component – which fell quite sharply in November. In fact, the drop from 70.0 in October to 65.4 in November represents the largest in 21 months. That saw the component drop to its lowest since April but is still sitting well above historical levels.What about December then?MNI notes that the signal is a little more mixed based on regional Fed surveys. They note that Dallas was the only one of five Fed surveys to report a dip in prices paid from November to December. Meanwhile, New York and Philly reported noticeable upticks in prices paid pressures. At the balance, it points to a slightly higher prices paid gauge this time around.So, that is likely to help deflect the sharp drop in November as prices stabilise in December; that is if things play out expectedly. This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight A drop in the PMI to 52.3 signals slowing business activity, and here’s why that matters: This moderation could impact market sentiment, especially for sectors sensitive to economic growth like manufacturing and services. If the ISM print aligns with the estimate, traders might see a bearish reaction in equities and a potential flight to safety in bonds or gold. Keep an eye on the S&P 500 and related ETFs, as a sustained dip below key support levels could trigger further selling pressure. The broader economic context suggests that if this trend continues, it may lead to a reassessment of interest rate expectations, influencing forex pairs like USD/EUR. But don’t overlook the contrarian view: a lower PMI might already be priced in, and if the actual number surprises to the upside, it could lead to a sharp rebound in risk assets. Watch for the PMI release and be ready to adjust your positions based on the market’s reaction, particularly in the first hour after the announcement. 📮 Takeaway Monitor the PMI release closely; a drop to 52.3 could trigger bearish sentiment, especially in equities and sensitive sectors.

KEY POINTS:DAX 40 rises above the 25,000 levelSofter Eurozone inflation eases ECB tightening risks Positive risk sentiment keeps the bulls in chargeUS Supreme Court decision on Trump’s tariffs could spark a rally in risk assetsFUNDAMENTAL OVERVIEWThe German DAX has finally broken out of the 2025 range and extended the gains into new record highs above the 25,000 level. The risk sentiment has been positive in the past few days, and a couple of economic data gave the bulls more conviction to keep pushing into new highs.In fact, we just got the latest inflation readings for Germany and Eurozone as a whole, and they showed a welcome easing. One of the biggest risks for 2026 has been the risk of earlier than expected rate hikes. The softer inflation data not only eases the tightening risk but also gives traders hope for more rate cuts down the road. Couple that with easing tariff uncertainty and fiscal boost and you get a positive outlook for the stock market.Moreover, yesterday the US Supreme Court scheduled Friday as an opinion day, which could see a decision on Trump’s tariffs. In case the tariffs are struck down, the DAX is likely to rally on expected better global growth. On the other hand, if tariffs are kept in place, it shouldn’t change much given that the markets have already adjusted to the tariffs.DAX 40 TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that the DAX (CFD contract) broke out of the 2025 range and extended the gains above the 25,000 level. The buyers piled in on the breakout with a defined risk below the resistance-turned-support. The sellers will now need to see the price falling back below the previous all-time high to regain some control and start positioning for a drop back into the 23,000 level.DAX 40 TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see that we have a couple of upward trendlines defining the bullish momentum. If we get a pullback into the support zone around the 24,700 level, we can expect the buyers to step in with a defined risk below the trendline to keep pushing into new highs. The sellers, on the other hand, will look for downside breaks to target new lows.DAX 40 TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we can see that we have a minor trendline defining the bullish momentum on this timeframe. Aggressive buyers might lean on the trendline to keep pushing into new highs, although from risk to reward perspective, the area around the major support would offer a much better dip-buying opportunity. The sellers, on the other hand, will look for a break lower to pile in for a pullback into the major support.UPCOMING CATALYSTSToday we have the US ADP, the US ISM Services PMI and the US Job Openings data. Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report and a potential US Supreme Court decision on Trump’s tariffs. This article was written by Giuseppe Dellamotta at investinglive.com. 🔗 Source 💡 DMK Insight The DAX 40 breaking above 25,000 is a significant bullish signal, especially with softer Eurozone inflation easing ECB tightening fears. This shift in sentiment could lead to increased risk appetite among traders, particularly as the US Supreme Court’s decision on Trump’s tariffs looms, potentially driving further rallies in risk assets. Traders should watch for how this impacts correlated markets like the Euro and US equities. If the DAX maintains momentum above this key level, it could attract more institutional buying, reinforcing the bullish trend. However, keep an eye on any sudden shifts in inflation data or ECB commentary that could reverse this sentiment. The real story here is the potential for a cascading effect across European markets if the DAX continues to rally, pushing other indices higher as well. Watch for support around the 25,000 mark and resistance levels that could emerge as the DAX tests new highs. 📮 Takeaway Monitor the DAX’s performance around the 25,000 level; a sustained break could trigger bullish momentum in European equities and related assets.

It would be unprecedented if it were to happen, but the same can be said for a lot of things during Trump’s presidency. As a reminder, Greenland is a semi-autonomous territory of Denmark and part of the NATO alliance. So if the US tries to pull off something, expect there to be a lot of protest and condemnation especially from Europe.In trying to understand the potential impact in the major currencies space – the dollar in particular – if the US does try to claim Greenland, it arguably can be broken down into two phases.The first being the initial reaction to it all. Geopolitical conflict often ties to risk-off sentiment and typically is a positive for the dollar. Safety bids will come in amid the more defensive risk mood and that’s also what we saw with the situation in Venezuela.That being said, I would expect the flows here to be rather short-lived. And perhaps in this event, maybe only for a couple of hours at best. The thing is, markets now have some time to digest the whole thing before it actually happens. And so even when it does, the market flow can quickly move to the next part which is where the macro picture comes into play.In pulling off such a stunt, Trump risks a major breakdown in global alliance and trust. Not just in terms of politics, but also for the dollar’s status as a reserve currency. The collective framework in which the global financial system is built around the dollar will now be threatened as the US becomes an unstable player in world politics – even more so than it already is.That will likely see many countries accelerate their push to de-dollarise and shifting their reserves elsewhere.And that means potentially shifting towards the likes of the euro and Chinese yuan. However, the simplest argument remains one that is right in front of us and that has been shining brightly for the last two years. And that is gold once again.In this instance, I would argue that gold is the ultimate safe haven asset. It’s just everything about it.- Increasing geopolitical conflict ✓- De-dollarisation picking up ✓- Higher premium to hold US debt and further weakening in US fiscal position ✓Circling back to the dollar, just be mindful of the potential spike and release reaction that could follow if we do see the unprecedented happen. Never say never in markets. And never say never when it comes to Trump. This article was written by Justin Low at investinglive.com. 🔗 Source