Here’s what happens to stocks and currencies after German Federal elections

September 22nd, 20176:56 am @

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Cars drive past election campaign posters hanging from lampposts on August 22, 2013 in Berlin, Germany.



Do not see any surprises in German election:


The elections are taking place amid a period within which global events such as tensions regarding North Korea’s nuclear program, hints that central banks are finally beginning their slow march towards the ultra-loose monetary policy exit door and a spate of both natural weather-related disasters and terrorist attacks have been keenly influencing the trajectory of global markets. Therefore, while the data show a remarkably consistent pattern and provide an interesting reference point, it’s to be expected that these types of events will continue to drive the course of European equities in the days following this year’s election to determine the Chancellor of Germany.

This election sees incumbent Angela Merkel standing for her fourth term as Chancellor and considered the favorite to win with the latest polls pointing to her center-right Christian Democratic Union (CDU) and its Bavarian sister-party the Christian Social Union (CSU) sweeping up a combined vote of around 36 percent. This compares to 22 percent of the vote according to the same polls for the party of her closest rivals, the Social Democratic Party (SPD).



Germany must invest in the future, transport, digital infrastructure


While Merkel is widely expected to hold her position following the election, what is less clear is the composition of any coalition the government will likely be compelled to organize. However, the final composition should not matter too much to either the course of domestic politics or markets, according to Holger Schmieding, chief economist at Berenberg.

“…Observers tend to overemphasize the difference that the precise composition of the government in Berlin would make,” he wrote in a note to clients on Thursday.



How do German elections work?


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