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European Stocks, Euro Rise Before Key German Vote: Markets Wrap

(Bloomberg) — European stocks and the euro rose ahead of a German parliamentary vote that is expected to sign off on a spending program worth hundreds of billions of euros.

The Stoxx 600 index climbed 0.6%, with Germany’s DAX benchmark touching a new record high, before the landmark vote that should usher in more expansive fiscal policy and boost economic growth across Europe. German borrowing costs edged higher, while the euro firmed to a new five-month high versus the dollar. 

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“Long-term prospects for European equities have certainly improved, given the steeper growth trajectory in the years ahead,” said Wolf von Rotberg, equity strategist at Bank J. Safra Sarasin.  

Among individual stock movers, companies such as Thyssenkrupp AG and BAE Systems Plc extended recent gains, as a Bloomberg analysis showed these firms stand to benefit the most from the spending splurge. Auto stocks also climbed, lifted by optimism around the outlook for electric vehicles after China’s BYD Co. unveiled rapid-charging EV models. BYD shares earlier hit a record high, while Hong Kong-listed Chinese stocks jumped 2.5%. 

The prospect of German fiscal expansion has been a major catalyst for European equities’ outperformance this year, with a Bank of America Corp. monthly survey showing investors’ weighting to European stocks at a mid-2021 high. Their US allocations, meanwhile, have fallen by a record amount in recent weeks as President Donald Trump’s trade and labor policies threaten economic growth and company profits.  

“US equities are being challenged not only by trade and tariff uncertainty, but even more by uncertainty over the administration’s economic strategy,” Von Rotberg at Bank J. Safra Sarasin said, noting Treasury Secretary Scott Bessent’s dismissal of the recent Wall Street selloff as a “healthy” correction.

US S&P 500 futures slipped 0.4% though Nvidia Corp. rose in premarket trading ahead of chief executive Jensen Huang’s much-anticipated keynote speech at the company’s GAI conference.

The other big event of the week is the Federal Reserve meeting that kicks off later Tuesday. While interest rates are expected to stay unchanged, investors are eagerly awaiting Chair Jerome Powell’s assesment on the economy and how much policy support could be offered by the central bank this year. 

Meanwhile, uncertainty on the geopolitical front sent gold prices to a new record above $3,017 an ounce, as Israel shattered a nearly two-month ceasefire with Hamas by launching airstrikes across Gaza. The events also lifted oil prices for a third day. 

Investors will also be tracking newsflow from Trump’s upcoming call with Russian President Vladimir Putin, as the push continues to end fighting in Ukraine. Details of the US-Russia talks have been sketchy so far, but Trump has said the two sides were talking about “dividing up certain assets.”

Key events this week:

  • US housing starts, import price index, industrial production, Tuesday
  • Bank of Japan rate decision, Wednesday
  • Federal Reserve rate decision, Wednesday
  • China loan prime rates, Thursday
  • Bank of England rate decision, Thursday
  • US Philadelphia Fed factory index, jobless claims, existing home sales, Thursday
  • Eurozone consumer confidence, Friday
  • Fed’s John Williams speaks, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.4% as of 6:16 a.m. New York time
  • Nasdaq 100 futures fell 0.5%
  • Futures on the Dow Jones Industrial Average fell 0.4%
  • The Stoxx Europe 600 rose 0.6%
  • The MSCI World Index rose 0.2%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro rose 0.2% to $1.0942
  • The British pound was little changed at $1.2996
  • The Japanese yen fell 0.3% to 149.63 per dollar

Cryptocurrencies

  • Bitcoin fell 1.6% to $82,651.79
  • Ether fell 2.2% to $1,891.93

Bonds

  • The yield on 10-year Treasuries was little changed at 4.30%
  • Germany’s 10-year yield advanced three basis points to 2.84%
  • Britain’s 10-year yield advanced three basis points to 4.67%

Commodities

  • West Texas Intermediate crude rose 1.6% to $68.63 a barrel
  • Spot gold rose 0.8% to $3,025.40 an ounce

This story was produced with the assistance of Bloomberg Automation.

©2025 Bloomberg L.P.

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