Euro stutters – just a bit – on German politics
By Arnaud Masset
“It is better not to govern, than to govern poorly.” So said the leader of Germany’s Free Democrats as he took his party out of coalition talks convened by Chancellor Angela Merkel. But the prospect of a minority government or even new elections only fazed the EUR. In Monday trading it fell 0.60% against the US dollar and slid as low as USD 1.1722, but then bounced back above 1.18. Investors are not worried about Germany’s economic outlook.
The German DAX stock index opened slightly lower on Monday, at 12,932 points, before slowly recovering towards Friday’s close. European indices were treading water this morning, exception Swiss ones. The Swiss Performance Index (SPI) and Swiss Market Index (SMI) were up 0.50% and 0.66%, respectively, as Roche’s stock jumped more than 4% after the drug maker received approval for two experimental medicines for cancer and haemophilia. The pound sterling extended gains this morning, with GBP/USD rising towards the next resistance at 1.3338 (high from 13 October). Investors are positive again about Brexit. Rumours is the UK will pay (handsomely) to reach a favourable settlement.