The European markets all dipped this Monday, with little to process beyond the far right surge at Sunday’s German election.
While Angela Merkel secured her fourth term as Chancellor with around 35% of the vote, that’s the worst result for the CDU since 1945, a shift largely due to the success of the far-right AfD, who, having existed for only 4 years, picked up 13% of the ballot. Merkel’s diminished authority – and the rise of a party with links, and similar eurosceptic views (among other things), to UKIP and France’s National Front – appears to be weighing on both the euro and the region’s indices.
The currency is down 0.3% against the dollar, leaving it just above the $1.19 level it’s repeatedly returned to in the last couple of weeks. Against sterling, meanwhile, it fell nearly half a percent, keeping it around the €0.88, 2 month low mark. Normally this would give a leg up to the DAX and CAC; neither, however, seems particularly happy with the German election result, with both indices in the red by around 0.2%. Beyond the election, the only other thing on offer this morning is the German Ifo business climate, though a mild rise from 115.0 to 116.0 month-on-month is unlikely to really chance the tone of trading.
As for the FTSE, with sterling gaining on the euro, and rising 0.2% against the dollar, the UK index dropped by 25 points, once again taking it below the 7300 mark it struggled with last week. There isn’t much to the UK economic calendar this Monday – or, in fact, much of the week (until Friday, at least) – meaning the FTSE is likely to remain trading in relationship the forex market.
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