German DAX Index Closes Higher as Eurozone Inflation Cools

12:12 PM EST, 01/07/2026 (MT Newswires) -- German shares remained in the green on Wednesday, with the blue-chip DAX index gaining 0.92%, after the market assessed key economic releases, including the latest eurozone inflation print and Germany's labor market data. Flash data from Eurostat showed annual inflation in the euro area eased to 2% in December 2025, in line with market forecasts and against 2.1% in the prior month. Meanwhile, the core rate, which excludes energy, food, alcohol and tobacco, came in at 2.3%, down from the previous and expected 2.4%. "Persistent services inflation is still a concern for the [European Central Bank]. However, we expect some progress in December and more disinflation over 1Q. We still have two more data prints before the February meeting, and we think data could surprise the ECB to the downside, particularly aſter the hawkish forecast update at the Dec meeting. Even more so now. We update our inflation forecasts to reflect recent developments and lower 2027 to 1.6% (-20bp, ETS2 driven). We have headline and core inflation well below the ECB throughout the forecast horizon, but particularly in 1Q26," BofA Global Research said. Back home, the federal agency Bundesagentur für Arbeit reported that Germany's unemployment rate remained at 6.3% in the final month of 2025, as expected. The number of unemployed individuals climbed by 3,000 for the month, compared with the 1,000 gain earlier and the consensus estimate of 5,000. "Over the last four years, German unemployment has increased by some 500,000 people. This gradual worsening reflects textbook economics: with the economy effectively stagnating for more than five years and industry facing severe structural challenges, a deterioration in the labour market was inevitable," ING wrote. Meanwhile, Germany's construction sector reversed a prolonged downward trend at the end of 2025, as civil engineering activity accelerated at its quickest pace since March 2011. According to Hamburg Commercial Bank and S&P Global, the HCOB Germany Construction PMI Total Activity Index rose to 50.3 in December 2025 from the previous month's 45.2. On the corporate front, Bayer (BAYN.F) was up 0.91%, after its Monsanto subsidiary filed patent infringement lawsuits against Pfizer, BioNTech and Moderna in US federal court, alleging misuse of its mRNA technology in the development of their COVID-19 vaccines. Concurrently, the German biopharmaceutical group extended a similar legal challenge against Johnson & Johnson, claiming the DNA-based process the US-based healthcare group used encroached on its patent rights.