Euro, German stocks gain as markets welcome election outcome

The euro and German stocks rallied on Monday after Germany’s election put centrist parties on track to form a coalition, though concerns over economic policy talks remained.

Friedrich Merz is set to become chancellor after his conservative opposition won Sunday’s vote, likely forming a coalition with the ruling centre-left Social Democrats despite their third-place finish behind the far-right Alternative for Germany.

The euro hit a one-month high of $1.0528 before settling 0.22 per cent higher at $1.0481. Germany’s DAX rose 0.73 per cent, while the STOXX 600 gained 0.19 per cent. Meanwhile, Wall Street futures rebounded after last week’s tech-led selloff, with S&P 500 and Nasdaq futures up 0.6 per cent.

Investors are closely watching Nvidia’s earnings on Wednesday and the Federal Reserve’s core inflation data on Friday. In commodities, gold held at $2,946 an ounce, while Brent crude remained flat at $74.37 per barrel.

Attribution: Reuters

Subediting: M. S. Salama