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Asian stock markets : https://tmsnrt.rs/2zpUAr4

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DAX up, Euro hits 1-mth high as Merz wins German vote

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Wall St futures bounce ahead of Nvidia ( NVDA ) earnings

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Asia stocks dip, trade thin with Tokyo on holiday

(Adds Chinese stocks, updates prices)

By Wayne Cole

SYDNEY, Feb 24 (Reuters) - European shares and the euro

climbed on Monday as Germany's election produced no nasty

surprises, while Wall Street futures firmed on hopes results

from AI diva Nvidia ( NVDA ) this week would justify the tech sector's

sky-high valuations.

DAX futures jumped 1.1%, while the single currency

rose 0.5% to $1.0516 and looked set to test its

January top at $0.10535. EUROSTOXX 50 futures added

0.4% and FTSE futures 0.1%.

German's new conservative leader Friedrich Merz still has to

form a coalition government and it is not yet clear whether that

will include one or two partners, with the latter likely to take

more time and horse trading.

The uncertainty comes as European Union 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.

Liquidity was thinned by a holiday in Tokyo markets and

MSCI's broadest index of Asia-Pacific shares outside Japan

dipped 0.2%. Nikkei futures traded at

38,310, under the cash close of 38,776.

Chinese blue chips eased 0.1%, but Hong Kong

shares firmed 0.2% to extend their recent tech-driven

bull run.

S&P 500 futures added 0.4% and Nasdaq futures

0.5%. The Nasdaq had fallen 2.5% last week, its worst week in

three months, with losses led by the Magnificent Seven.

That pullback raised the stakes for Nvidia's ( NVDA )

results on Wednesday where investors are looking for

fourth-quarter sales around $38.5 billion and first-quarter

guidance around $42.5 billion.

As usual, options point to a share price move of around 8%

in either direction should the results surprise.

Wall Street had taken a hit on Friday when a survey on

services showed a shock slide in activity amid concerns about

tariffs and cost pressures. There were even reports the White

House was pressuring Mexico to put its own tariffs on Chinese

imports as part of a deal.

INFLATION SCARE

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 could be overshadowed by tariff worries.

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

expectations for 5 to 10 years ahead climbed to 3.5%, the

highest since 1995.

"Longer-run inflation expectations are at risk of becoming

de-anchored," warned analysts at ANZ in a note. "That was the

clear message from the subset of soft U.S. economic surveys

released on Friday, and for the Fed, the data signal that

enhanced caution is required."

At least nine Fed officials are speaking this week, some of

them more than once, and are likely to reiterate the cautious

message on further rate cuts.

Markets are not priced for an easing until July, with just

two cuts implied all year.

Treasuries rallied in the wake of the soft services data,

though inflation and supply uncertainties remain a hurdle and

10-year futures were down 5 ticks on Monday.

The drop in Treasury yields, particularly in real terms, has

weighed on the dollar against the yen as Japanese yields rise on

speculation of another rate hike from the Bank of Japan.

The dollar was pinned at 149.36 yen, having shed

2% last week to threaten chart support at 148.65. The dollar

index dipped 0.3% to 106.210, with losses on the euro,

sterling and Swiss franc.

In commodity markets, gold remained well supported at $2,935

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 see

sanctions eased on Russia, boosting its oil exports.

Brent was 11 cents higher at $74.54 a barrel, while

U.S. crude added 1 cent to $70.42 per barrel having hit a

two-month low earlier.