The DAX is in focus this morning after possible coalition talks in Germany breakdown as the Free Democratic Party walked out of the discussions. This leaves Angela Merkel of the Christian Democratic Union in a tricky position, as Ms Merkel may have to from a minority government or hold another federal election. The political uncertainty in Germany will also have a negative knock-on effect to the politics of the EU, and the Brexit talks. Germany has been the engine that has kept the eurozone running for the past few years, and while it stalls, so could the region.
Carillion (LON:CLLN) shares are up 1.1% after the company stated it won two contracts in relation school building contracts. The construction company proved it is capable of winning contracts even though it has major cash flow problems. The stock collapsed on Friday when it warned it might break its covenants next month. It will talk a lot more than a couple of new contracts to turn Carillion around, but if they can rectify their cash flow situation, it could be able to attract more buyers.
Shire (LON:SHP) shares are down 1.4% after Mediclinic (LON:MDCM) announced they are no longer interested in making an offer for the company. Shares in Shire have been in decline since August 2015, and the stocks could target 3424p.
EUR/USD is fractionally higher today despite the setbacks to political talks in Germany. The US dollar is slightly softer today, and that is playing a role too. Mario Draghi, the President of the European Central Bank is due to speak at 2pm and 4pm (UK time).
GBP/USD is higher this morning as there is talk that Theresa May is considering upping the amount she is willing to pay for the EU ‘divorce bill’. The prospect of improving the Brexit talks is sending sterling higher, as traders would be more comfortable being long the pound while the political outlook appears to be improving.
We are expecting the Dow Jones to open down 43 points at 23,315, and we are calling the S&P 500 down 5 points at 2573.
Urban Outfitters (NASDAQ:URBN) will announce their third-quarter figures today.
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