As we enter the final week of February, the 'Step to the Right' in the German elections has caused some market volatility. DAX futures are up 1%, and EUR/USD has rallied. The immediate resistance is the 100-day moving average at 1.0537, and then the 200-day MA sits at 1.0733.
Friedrich Merz, leader of the Christian Democratic Union (CDU), is set to become Germany's next Chancellor and will spend the next couple of weeks putting his coalition government together after his conservative party won 28.6% of the vote. However, the other story has been the rise of AfD, the far-right Alternative for Germany, which came second with 20.8%.
Not wanting to keep President Donald J. Trump out of the headlines, he signed a National Security Presidential Memorandum (NSPM) aimed at promoting foreign investment while protecting America's national security interests, particularly from threats posed by foreign adversaries like the People's Republic of China.
As for the week ahead, in China, we have the National People’s Congress holding its 14th session and a PBOC policy review on Tuesday. On Wednesday, we have Australian CPI data and, in the U.S., Nvidia earnings—has DeepSeek derailed this darling of the stock markets? Thursday is the ECB minutes—Lagarde has previously said it is “entirely premature” to talk about neutral rates. Has that stance changed? Finally, on Friday, in amongst the month-end activity, we have Japanese CPI, Canadian CPI, and US PCE data.
Marketwise, Bitcoin was little changed at $95,720.32, Ether fell 2.9% to $2,726.24, Germany’s 10-year yield declined six basis points to 2.47%, spot gold rose 0.1% to $2,939.23 an ounce, and West Texas Intermediate crude fell 0.2% to $70.25 a barrel.
As for today, we have the German IFO and Eurozone CPI.
