Europe: german elections and inflation data shape market sentiment
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Key Political Event:
Markets are digesting the outcome of the German elections (Sunday, Feb 23). If major parties struggle to form a stable coalition, concerns may arise over fiscal stimulus policies. The euro is reacting to Frederick Merz’s likely leadership and whether Germany will increase defense spending, which could impact bond yields.
Inflation Data in Focus:
Markets will watch Spanish inflation (Thursday), followed by French and German inflation (Friday). Analysts expect a downward trend in price pressures, potentially supporting ECB rate-cut bets for mid-2025.
Key Economic Releases:
Germany’s Ifo Business Climate Index (Monday): Expected to align with strong ZEW sentiment.
Q4 German GDP Breakdown (Tuesday): Provides insights into sectoral performance.
GfK German Consumer Sentiment (Wednesday): A crucial indicator of spending trends.
French Consumer Confidence (Wednesday) & Consumer Spending (Friday).
Italy Business & Consumer Sentiment (Thursday).
Bond Auctions:
Germany: €1.5B in 2053 green Bunds (Tuesday), €2B in 2036 & 2038 Bunds (Wednesday).
Belgium (Monday) and Italy (Tuesday & Thursday) to issue bonds.
Markets are digesting the outcome of the German elections (Sunday, Feb 23). If major parties struggle to form a stable coalition, concerns may arise over fiscal stimulus policies. The euro is reacting to Frederick Merz’s likely leadership and whether Germany will increase defense spending, which could impact bond yields.
Inflation Data in Focus:
Markets will watch Spanish inflation (Thursday), followed by French and German inflation (Friday). Analysts expect a downward trend in price pressures, potentially supporting ECB rate-cut bets for mid-2025.
Key Economic Releases:
Germany’s Ifo Business Climate Index (Monday): Expected to align with strong ZEW sentiment.
Q4 German GDP Breakdown (Tuesday): Provides insights into sectoral performance.
GfK German Consumer Sentiment (Wednesday): A crucial indicator of spending trends.
French Consumer Confidence (Wednesday) & Consumer Spending (Friday).
Italy Business & Consumer Sentiment (Thursday).
Bond Auctions:
Germany: €1.5B in 2053 green Bunds (Tuesday), €2B in 2036 & 2038 Bunds (Wednesday).
Belgium (Monday) and Italy (Tuesday & Thursday) to issue bonds.