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Finalized Eurozone inflation figures are also out later today. However, barring a marked revision, the numbers are unlikely to impact risk assets.<\/p>\n
On Sunday, February 23, Germany\u2019s election results delivered no shocks, with conservative Friedrich Merz set to become the new Chancellor. Merz pledged to reduce EU dependence on the US ahead of coalition negotiations.<\/p>\n
Markets reacted positively: the EUR\/USD<\/a> rallied 0.55% to 1.05137, and the DAX futures jumped 251 points ahead of Monday\u2019s European opening bell.<\/p>\n Despite the positive market reaction, experts expressed concerns. Robin Brooks, Senior Fellow at the Brookings Institute, commented<\/a>:<\/p>\n \u201d Today\u2019s election is a disaster for Germany. CDU underperforms and goes weakened into coalition negotiations with SPD and Greens, who undermined CDU\u2019s efforts to restrict immigration and take votes away from AfD. Deeply cynical electioneering by SPD and Greens that only helps AfD.\u201d<\/p>\n<\/blockquote>\n A Jamaica coalition comprising CDU\/SPD\/Greens could allow the AfD to continue growing and have a greater presence in the next election.<\/p>\n However, things could have been worse. Brooks acknowledged<\/a>:<\/p>\n \u201cIt could have been worse, you are right. AfD is also \u2013 along with CDU \u2013 underperforming expectations when you take into account the string of attacks in the run-up to the election. Hopefully a sign that most Germans are still moderate and not panicking\u2026\u201d<\/p>\n<\/blockquote>\n Meanwhile, in the US, weaker-than-expected services data weighed on risk assets.<\/p>\n The S&P Global Services PMI<\/a> slid unexpectedly from 52.9 in January to 49.7 in February, signaling a sector contraction. Accounting for around 80% of the US economy, February\u2019s numbers could support a more dovish Fed rate path.<\/p>\n However, the Michigan Inflation Expectations Index jumped from 3.3% in January to 4.3% in February, potentially delaying Fed rate cuts.<\/p>\n The Kobeissi Letter commented on US inflation, stating:<\/p>\n \u201cUS CPI inflation is on track to hit 4.6% over the next 6 months, according to Bank of America. CPI inflation has averaged +0.4% on a month-over-month basis over the last 3 months. If this trend continues, this puts year-over-year inflation on pace to hit 4.6% by July, the highest since April 2023.\u201d<\/p>\n<\/blockquote>\n These projections underscored the increasing uncertainty about the Fed rate path amid ongoing concerns about tariffs.<\/p>\n US equity markets<\/a> tumbled on Friday, February 21, as investors digested the service sector and inflation numbers. The Nasdaq Composite<\/a> Index dropped by 2.20%, while the Dow<\/a> and the S&P 500<\/a> saw losses of 1.69% and 1.71%, respectively.<\/p>\n On February 24, the Chicago Fed National Activity and Dallas Fed Manufacturing Indexes will draw interest.<\/p>\n [ad_2]<\/p>\n","protected":false},"excerpt":{"rendered":" [ad_1] FX Empire \u2013 German Ifo Business Climate IndexFinalized Eurozone inflation figures are also out later today. However, barring a marked revision, the numbers are unlikely to impact risk assets. German Election Results Bring Relief but Concerns Remain On Sunday, February 23, Germany\u2019s election results delivered no shocks, with conservative Friedrich Merz set to become the new Chancellor. Merz pledged to reduce EU dependence on the US ahead of coalition negotiations. Markets reacted positively: the EUR\/USD rallied 0.55% to 1.05137, and the DAX futures jumped 251 points ahead of Monday\u2019s European opening bell. Expert Views on the German Election Results: Bad But Could Be Worse! Despite the positive market reaction, experts expressed concerns. Robin Brooks, Senior Fellow at the Brookings Institute, commented: \u201d Today\u2019s election is a disaster for Germany. CDU underperforms and goes weakened into coalition negotiations with SPD and Greens, who undermined CDU\u2019s efforts to restrict immigration and take votes away from AfD. Deeply cynical electioneering by SPD and Greens that only helps AfD.\u201d A Jamaica coalition comprising CDU\/SPD\/Greens could allow the AfD to continue growing and have a greater presence in the next election. However, things could have been worse. Brooks acknowledged: \u201cIt could have been worse, you are right. AfD is also \u2013 along with CDU \u2013 underperforming expectations when you take into account the string of attacks in the run-up to the election. Hopefully a sign that most Germans are still moderate and not panicking\u2026\u201d US Services Sector Contracts as Inflation Returns Meanwhile, in the US, weaker-than-expected services data weighed on risk assets. The S&P Global Services PMI slid unexpectedly from 52.9 in January to 49.7 in February, signaling a sector contraction. Accounting for around 80% of the US economy, February\u2019s numbers could support a more dovish Fed rate path. However, the Michigan Inflation Expectations Index jumped from 3.3% in January to 4.3% in February, potentially delaying Fed rate cuts. The Kobeissi Letter commented on US inflation, stating: \u201cUS CPI inflation is on track to hit 4.6% over the next 6 months, according to Bank of America. CPI inflation has averaged +0.4% on a month-over-month basis over the last 3 months. If this trend continues, this puts year-over-year inflation on pace to hit 4.6% by July, the highest since April 2023.\u201d These projections underscored the increasing uncertainty about the Fed rate path amid ongoing concerns about tariffs. US Markets Tumble on Economic Data US equity markets tumbled on Friday, February 21, as investors digested the service sector and inflation numbers. The Nasdaq Composite Index dropped by 2.20%, while the Dow and the S&P 500 saw losses of 1.69% and 1.71%, respectively. Key Focus: Dallas and Chicago Fed Reports On February 24, the Chicago Fed National Activity and Dallas Fed Manufacturing Indexes will draw interest. [ad_2]<\/p>\n","protected":false},"author":1,"featured_media":36215,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[45],"tags":[],"class_list":["post-36214","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financas"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/tiproject.online\/index.php\/wp-json\/wp\/v2\/posts\/36214","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tiproject.online\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tiproject.online\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tiproject.online\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tiproject.online\/index.php\/wp-json\/wp\/v2\/comments?post=36214"}],"version-history":[{"count":0,"href":"https:\/\/tiproject.online\/index.php\/wp-json\/wp\/v2\/posts\/36214\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tiproject.online\/index.php\/wp-json\/wp\/v2\/media\/36215"}],"wp:attachment":[{"href":"https:\/\/tiproject.online\/index.php\/wp-json\/wp\/v2\/media?parent=36214"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tiproject.online\/index.php\/wp-json\/wp\/v2\/categories?post=36214"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tiproject.online\/index.php\/wp-json\/wp\/v2\/tags?post=36214"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Expert Views on the German Election Results: Bad But Could Be Worse!<\/h2>\n
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US Services Sector Contracts as Inflation Returns<\/h2>\n
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US Markets Tumble on Economic Data<\/h2>\n
Key Focus: Dallas and Chicago Fed Reports<\/h2>\n