European stock markets rose Monday, starting the new week on a positive note as Germany moved nearer to the formation of a coalition government.
At 03:05 ET (08:05 GMT), the DAX index in Germany climbed 0.7%, the CAC 40 in France gained 0.6% and the FTSE 100 in the UK rose 0.1%.
Sentiment boosted by likely German stimulus
German election winner Friedrich Merz’s conservatives and the Social Democrats concluded preliminary talks on forming a coalition government on Saturday.
The two parties were racing for a deal before next week when they hope to push a loosening of Germany’s borrowing limits through parliament to revive growth in Europe’s largest economy.
The idea of additional stimulus in Germany has boosted sentiment throughout the region, particularly given the macro-economic worries President Donald Trump’s trade policies are causing on Wall Street.
JPMorgan has lifted its forecast for the euro area’s economic growth for 2025 on the back of Germany’s fiscal loosening reforms - now expecting 0.8% growth, up from its previous forecast of 0.7%, and 1.2% growth in 2026, up from 0.9%.
"This revision is primarily driven by Germany, but we also anticipate slightly stronger growth across the rest of the region from spillovers and slightly looser fiscal policy," said JPM economists in a note dated March 7.
There was some positive economic news Monday, after data showed that German industrial output rose in January by 2.0% compared with the previous month, beating expectations for a 1.5% rise.
Eurogroup meets in Brussels
The Eurogroup meets in Brussels, with the participation of European Central Bank President Christine Lagarde among others, just a few days after the central bank cut interest rates once more to try and boost growth.
Also of interest this week will be a meeting between U.S officials and their Ukrainian counterparts in Saudi Arabia to discuss a peace deal in the war between Ukraine and Russia, with the gathering said to take place in Jeddah on Tuesday.
This follows the hostile meeting between President Donald Trump and Ukrainian President Volodymyr Zelenskiy last month, which resulted in the U.S. withdrawing military aid and intelligence from Ukraine.
TSMC reports surge in revenue
The tech sector is likely to be in focus Monday, after Taiwan Semiconductor Manufacturing (NYSE:TSM), the world’s largest contract chipmaker, reported a hefty jump in its February 2025 revenue amid robust demand for its chips used in artificial intelligence applications.
The chipmaking giant continues to benefit from strong demand for advanced semiconductor technologies, driven by artificial intelligence and high-performance computing applications.
Crude steadies after hefty losses
Oil prices traded largely unchanged Monday, steadying after falling to more than three-year lows last week on concerns over slowing demand amid uncertainty over the impact of U.S. trade tariffs.
At 03:05 ET (08:05 GMT), Brent futures rose 0.1% to $70.49 a barrel, while U.S. West Texas Intermediate futures rose 0.1% to $67.10 a barrel.
Chinese consumer and producer inflation data, released over the weekend, showed a persistent deflationary trend in the world’s biggest oil importer, adding to underlying concerns.
