Markets stabilised, to open the new trading week, following last week's big falls. The pressure was on equity markets following the announcement of further tariffs and fears of a growing likelihood of a global trade war. German Federal elections were held, and the results were in line with expectations. They will result in a change in Government, but only in the composition, as it is more a re-arrangement of the existing ruling parties. The Centre Right (CDU/SCU) will lead the new Government under Frederich Merz, but his coalition partners will be the same, as those that formed the previous Government. The Afd party were the big winners, doubling their last election result, to over 20%. They will be prevented from any participation in Government, by a ‘firewall’ placed on them, by all other German political parties. The policies will remain largely the same and thus we will continue to see the de-industrialisation of the German economy. Markets will watch the German GDP number, set to be released today, to confirm the deep recession Germany is in. The US Dollar was steady, with the EUR trading 1.0470, while the GBP traded around 1.2650.The stable reserve allowed the commodity currencies to settle, with the AUD trading around 0.6350, while the NZD consolidates above 0.5700. Market attention will be on growth and inflation data from Europe and the US, over the remainder of the week, with the caveat always being Geo-Political developments from the USA.
