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DAX up, Euro hits one-month high after Merz wins German

vote

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Germany likely heading for centrist grand coalition

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Wall St futures bounce ahead of Nvidia ( NVDA ) earnings

By Harry Robertson and Wayne Cole

LONDON/SYDNEY, Feb 24 (Reuters) - German stocks rallied

on Monday and the euro reached a one-month high after Germany's

election result put centrist parties on track to form a

coalition.

European shares more broadly held steady, while Wall Street

futures rose after a U.S. sell-off on Friday.

Friedrich Merz was set to become Germany's next chancellor

after his opposition conservatives won the national election on

Sunday. Merz should be able to form a coalition to govern with

the ruling centre-left Social Democrats, even though the party

came third behind the far-right Alternative for Germany.

"In the end (it was) a result that was close to the latest

exit polls and should be a very market-friendly outcome," said

Peter Schaffrik, global macro strategist at RBC Capital Markets.

The euro rose to a one-month high of $1.0528

before dipping to last trade 0.1% higher at $1.0469.

"While Merz seems determined to ease off the so-called debt

brake, which limits annual borrowing to 0.35% of GDP, it won't

be straightforward, because he will need a two-third majority in

parliament," said Susannah Streeter, head of money and markets,

Hargreaves Lansdown.

Germany's DAX stock index rose 0.57%. The

pan-European STOXX 600 index last traded flat as tech

stocks slipped.

German coalition talks start as EU leaders are set to hold

an extraordinary summit on March 6 to discuss additional support

for Ukraine and how to pay for European defence needs.

This week marks three years since Russia began its

full-scale invasion of Ukraine.

WALL STREET STEADIES

S&P 500 futures climbed 0.47% while Nasdaq futures

gained 0.39%. The Nasdaq fell 2.5% last week, its worst

week in three months, with losses led by the "Magnificent Seven"

tech firms.

Wall Street took a hit on Friday when a survey on services

showed a slide in activity amid concerns about tariffs and cost

pressures.

The pullback has raised the stakes for Nvidia's ( NVDA )

results on Wednesday when investors will be looking for further

rapid growth in revenue.

The Federal Reserve's favoured measure of core inflation is

due on Friday and expected to show a slowdown to 2.6% from 2.8%,

but any impact could be clouded by the focus on tariffs, which

could be inflationary.

A survey of U.S. consumers out on Friday showed inflation

expectations for the next five years climbed to 3.5%, the

highest since 1995.

"There are many irons in the fire, and markets don't have

the privilege of looking much beyond daily developments," said

Francesco Pesole, currency strategist at ING.

The dollar index, which tracks the currency against

six peers, was very slightly higher at 106.64.

The U.S. currency rose 0.32% against the yen to

149.77, after sliding last week on the back of rising

expectations of further rate hikes from the Bank of Japan.

In commodity markets, gold remained well supported at $2,947

an ounce, having climbed for eight weeks in a row.

Oil has been heading in the other direction, in part on

speculation an eventual peace deal on Ukraine could lead to an

easing of sanctions on Russia that could boost its fuel exports.

Brent was flat at $74.45 a barrel, continuing to

trade around its lowest level since late December.