Merkel Wins The Elections
Gold Prices Dip
EU Markets Open Lower
Mon, September 25: In Today’s Markets…
1. Merkel Wins The Elections
Merkel will remain atop Germany as the conservative CDU party is projected to win the largest percentage of votes with 33%, securing Merkel a fourth term as the country’s chancellor. This was a widely expected result but what is now alarming for the chancellor is the support that the anti-immigrant party AfD (Alternative for Germany) has gained. Exit polls show the AfD claiming over 13% of the votes, meaning it is set to win seats in the Bundestag for the first time ever. Angela Merkel’s party recorded its weakest result since 1949, and so did Martin Schulz’s Social Democrats party with a 20% of the votes. Merkel’s biggest challenge will now be to heal the divisions in German society as exposed by this election.*
2. Gold Prices Dip As N.Korea Worries Ease
Gold prices dipped in early Monday trade after hovering near one-month lows last week. Gold (XAUUSD) prices were weighed down by a firm U.S. dollar and as concerns over the Korean peninsula eased over the weekend. North Korean leader Kim Jong Un had said on Thursday that he was considering the “highest level of hard-line countermeasure” and threatened to detonate a hydrogen bomb in the Pacific Ocean, in response to Trump’s warning the U.S. would be prepared to “totally destroy” Pyongyang if forced to defend itself or its allies.**
3. EU Markets Open Lower On German Election Concerns
European markets started the week on a bearish note this Monday after early German election results pointed to a fragmented parliament. Major indices like Germany’s DAX (GER_T30), UK’s FTSE 100 (GBR_100), France’s CAC 40 (FRA_40) and Europe’s Euro Stoxx 50 (EUR_50) were seen edging lower across the charts this morning after Chancellor Angela Merkel won a fourth term in office but was faced with a fractured parliament. The euro (EURUSD) also slipped against the dollar by more than 4 percent as of 7:00 GMT.
In other news, Brexit negotiators are set to resume in Brussels today. U.K. Prime Minister Theresa May asked for a transition period after March 29, 2019 – the day of U.K.’s official exit from the European Union – but failed to outline what the “new relationship” between the EU and the U.K. could look like. EU’s chief negotiator has commented that without a clear offer, the EU would not negotiate a trade deal let alone a transition deal.**
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*Source: Bloomberg
**Source: CNBC
