German Election
With just 18 days to go to the German election, tensions are building. The centre right CDU whose leader Friedrich Merz is likely to be the next Chancellor is under fire for proposing a tougher immigration policy. That says his critics is similar to the far right AFD and verboten given the antipathy of the CDU party to the AFD. Already the CDU and CSU are making nice in anticipation of the need to form a coalition. The irony is that Germany’s voters are still reaping the wind of former Chancellor Mutti Merkel’s open door policy for immigrants and paradoxically want to put a brake on the number of those immigrants entering Germany. Hence the rise and rise of the AFD. Another paradox in the world of the German voter is that the old West Germany is almost entirely CDU/CSU and the old East Germany is the opposite being almost entirely AFD. It may only be 35 years since the fall of the Berlin Wall but political integration across the Lander is yet to take place. Meanwhile would be Chancellor Friedrich Merz has absolutely ruled out any sort of co-operation by the CDU with the AFD.
EUR/USD 1.0322.
EUR buffeted
No not in a food way nor a good way for the EUR but by the many headwinds that Europe is facing which in no particular order are: political uncertainty (Germany as below, France and the EU’s fractious relationship with the new US administration); inflation which is not behaving as Mme Lagarde with her “mission driven” strategy is expecting; unquantifiable tariffs from the USA; the war in Ukraine and Russia’s territorial ambitions. Of course while not good for the EUR, Brits planning to acquire European assets or even just booking their summer holidays have been delivered an opportunity to purchase some cheap EURs.
GBP/EUR 1.2015.