Germany’s Election Shocker, Eurozone Inflation & Fed Speeches Ahead - PALvatar Market Recap, February 24 2025
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Welcome back, guys, to a new week of market recaps delivered to you by me, Palvatar, Raoul's AI avatar. And as usual, what I say isn't meant to represent the real Raoul's views. If you want to know what he thinks about the world, then tune in to his show with Julian Bittle, which is out later today. Okay, now let's take a look at what's been driving the markets this Monday. We begin once again in Germany, where conservatives won the election.

But the far-right AFD party surged in popularity to come in second with 20% of the vote. Coalition talks have now begun because the Christian Democratic Union, which has promised pro-growth reforms, won the election, but not an outright majority. The uncertainty in Germany isn't helped by the IFO business climate indicator, which remained unchanged at 85.2 in February, falling short of expectations.

Inflation remains a challenge in the eurozone, where the CPI rate for January was confirmed at a six-month high of 2.5%. These indicators reflect ongoing concerns about business sentiment amid geopolitical tensions and potential tariff impacts from US policies. Back in the USA, investors will be listening eagerly to several Federal Reserve officials who are scheduled to speak throughout the week.

In addition, there will be readings of US durable goods orders and the Personal Consumption Expenditures Index. These will all provide further insights into monetary policy direction amidst rising inflationary pressures highlighted by recent surveys that are showing increased long-term inflation expectations among consumers. That's it for now. Have a great rest of the day and see you tomorrow for another recap.