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23 Sep 2013
Merkel needs coalition talks, what does it mean for the Euro?
FXstreet.com (Barcelona) - What does Merkel's CDU landslide victory in German elections all mean for the Euro?
Despite the best victory since 1990, projections appear to agree on Merkel's necessity to seek a 'grand coalition', with one of the first options one between CDU/CSU and either Greens or the SPD, which should be bullish for the Euro.
In the scenario that Merkel manages to keep the current government, that may potentially be neutral for Bunds and slightly negative for the Euro, especially if the AFR anti-Euro party or Alternative für Deutschland, performs well.
However, some strategists seem to agree to the notion that despite some early Sunday knee-jerk reaction, they do not expect these initial moves to have much follow through, thus failing to act as any major catalyst for markets.
According to Boris Schlossberg, Co-Founder at BK Asset Management: "Despite strong showing looks like no absolute majority for Merkel - so some uncertainty for EURUSD, with only mild bounce in Asia so far."
Despite the best victory since 1990, projections appear to agree on Merkel's necessity to seek a 'grand coalition', with one of the first options one between CDU/CSU and either Greens or the SPD, which should be bullish for the Euro.
In the scenario that Merkel manages to keep the current government, that may potentially be neutral for Bunds and slightly negative for the Euro, especially if the AFR anti-Euro party or Alternative für Deutschland, performs well.
However, some strategists seem to agree to the notion that despite some early Sunday knee-jerk reaction, they do not expect these initial moves to have much follow through, thus failing to act as any major catalyst for markets.
According to Boris Schlossberg, Co-Founder at BK Asset Management: "Despite strong showing looks like no absolute majority for Merkel - so some uncertainty for EURUSD, with only mild bounce in Asia so far."