What is the current situation regarding Germany's upcoming federal election and its potential impact on European stock markets?

Germany's high-stakes federal election is scheduled for Sunday, with European stock markets already pricing in what they consider to be a near-perfect result. This suggests investors have developed specific expectations about the election outcome, potentially one that might ease borrowing restrictions and support economic reforms, as indicated by the DAX index reaching new highs. However, this market confidence could be misplaced. Analysts warn about complacency, referencing previous elections that delivered unexpected results leading to significant market shifts. The outcome holds particular importance amid ongoing global tensions and could substantially influence Europe's economic direction.