Despite plenty for investors to be down about – including, but not limited to, the political instability in Germany, what could be a damp squib Autumn Budget tomorrow and, well, Brexit – the markets burst into life this Tuesday afternoon.
The DAX was the unlikely leader, rocketing 1% higher to a fresh, 13200-tickling 8 day peak – all this without a whiff of real progress in Angela Merkel forming a coalition government. Normally these kinds of eurozone gains – the CAC is also up 0.6% – would suggest a rather miserable session for the euro. Yet while the currency hasn’t done much to reclaim yesterday’s politically-inspired losses, neither has it dug deeper into that ditch.
Instead the euro has nudged 0.1% higher against the dollar while dipping just 0.1% against the pound. It seems investors have faith that Germany will find a way to move past its current uncertainty without the kind of performance-damaging aftermath seen by some of its peers (looking at you, Spain and the UK).
Elsewhere this cheery turn helped out the US and UK indices. As it awaits more news on the Republican tax plan push the Dow Jones is up 150 points, leaving only 50 or so points from its all-times highs. The FTSE, on the other hand, had to settle for a far more meagre 0.3% rise, a comparatively disappointing increase that nevertheless saw the index re-cross 7400.
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