Frankfurt, Jan 6, 2026, 10:52 CET — Regular session
- Germany’s DAX was up about 0.1% near record highs in morning trade.
- A services survey still points to expansion, but cost pressures remain elevated.
- Traders are watching German December inflation and a run of factory surveys for rate clues.
Germany’s blue-chip DAX index was up about 0.1% at 24,887 points on Tuesday, holding close to record territory as European stocks steadied after a strong start to the year. German 10-year borrowing costs eased and gold edged higher, a backdrop that has helped keep risk appetite firm. 1
The small gain followed a surge that pushed benchmarks deeper into uncharted territory, with investors leaning on a growth narrative for 2026 and hoping Germany’s fiscal stance will add support. Strategists at Goldman Sachs have flagged German fiscal stimulus as a key prop for euro zone growth, while traders braced for German inflation figures and a fresh batch of manufacturing readings later in the day. 2
Economic data early on Tuesday showed Germany’s service sector remained in expansion mode at the end of 2025, even as momentum cooled. “The moderate growth in new business suggests that the start to the new year could be satisfactory,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, after the final HCOB services PMI printed at 52.7 in December — above the 50 level that separates growth from contraction. 3
Across the currency bloc, euro zone activity also stayed in growth territory, with the final composite PMI easing to 51.5 in December. “GDP growth is likely to have accelerated,” de la Rubia said, while warning that sticky service-sector price pressures are a key factor for an ECB that has been cautious on further rate cuts. 4
Defence remained a key pillar of the rally after geopolitical tensions flared at the weekend, lifting the sector across Europe and helping propel Germany’s benchmark to records on Monday. “It demonstrates that, despite the geopolitical instability around the globe, investors feel confident in the way markets are progressing,” said Danni Hewson, head of financial analysis at AJ Bell, as Rheinmetall led DAX gainers with a roughly 9% jump. 5
Strategists have also been leaning more constructive on European equities as the rally broadens. Goldman Sachs on Tuesday raised its 12-month STOXX 600 target to 625, saying, “Valuation is supported by strong global growth and falling interest rates in the U.S.” The bank noted the index’s 12-month forward price-to-earnings ratio — a valuation measure that compares share prices with expected earnings — is around 18, versus about 28 for the S&P 500. 6
But record levels can cut both ways. A firmer-than-expected German inflation print could reset rate expectations and squeeze the most rate-sensitive stocks, while any renewed energy shock tied to Venezuela would test the market’s calm.
Next up is a heavy data docket, with Germany and France due to publish December CPI figures and multiple December PMI readings across Europe and the United States. For Frankfurt traders, the immediate catalyst is Germany’s December inflation data due later on Tuesday. 7
