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23 Sep 2013
After Merkel bounce, markets dip on prospect of coalition negotiations.
FXstreet.com (London) - The Dax has fluctuated strongly today in the aftermath of Germany’s general elections on Sunday as Angela Merkel begins negotiations to form a new coalition government.
The German equity index climbed to 8,699.47 on the open of European trading, but has retraced to 8,661.69.
Angela Merkel won a resounding victory over her opponent Peer Steinbrueck and his centre-left Social Democrat party (SPD), who scored just under 26 per cent of the vote. However Merkel’s Christian Democratic Union (CDU) party fell just three seats short of that needed to achieve an outright majority in the Bundestag. Her former coalition partners, the Free Democrats (FDP) failed to secure the requisite 5 percent of the vote required to take seats in the German parliament. As a result Merkel will now negotiate with another party to form a majority – most likely that of Peer Steinbrueck.
German markets were also given a knock by disappointing manufacturing flash PMI, despite strong overall numbers. Germany continued its upwards momentum with business activity growing at the fastest rate for eight month. Employment grew at the sharpest rate for 18 months. However German manufacturers reported the weakest increase in output since June.
German 10-year government bunds are currently trading flat on the day at 1.96 percent.
EUR/USD has followed the fortunes of the Dax. The common currency strengthened on the open, but has declined to USD1.3509.
The German equity index climbed to 8,699.47 on the open of European trading, but has retraced to 8,661.69.
Angela Merkel won a resounding victory over her opponent Peer Steinbrueck and his centre-left Social Democrat party (SPD), who scored just under 26 per cent of the vote. However Merkel’s Christian Democratic Union (CDU) party fell just three seats short of that needed to achieve an outright majority in the Bundestag. Her former coalition partners, the Free Democrats (FDP) failed to secure the requisite 5 percent of the vote required to take seats in the German parliament. As a result Merkel will now negotiate with another party to form a majority – most likely that of Peer Steinbrueck.
German markets were also given a knock by disappointing manufacturing flash PMI, despite strong overall numbers. Germany continued its upwards momentum with business activity growing at the fastest rate for eight month. Employment grew at the sharpest rate for 18 months. However German manufacturers reported the weakest increase in output since June.
German 10-year government bunds are currently trading flat on the day at 1.96 percent.
EUR/USD has followed the fortunes of the Dax. The common currency strengthened on the open, but has declined to USD1.3509.