A grand coalition would be perceived negatively by the markets. It would be unlikely to push through any reforms because the parties hold contradictory positions and would neutralise each other. |
After today's council meeting the European Central Bank sent a less hawkish statement compared to market expectations. |
All this suggests that the ECB is in no hurry to hike interest rates. A move in February can effectively be ruled out. |
As a result, we expect that the German economy will continue to grow by a mere 1 percent on average in the years to come, ... the German election results lower the pressure on other European countries to implement major economic reforms. |
As long as they are rising, the ECB tends to raise interest rates. |
European production could pick up in the first quarter, with Germany doing better than its neighbors. Interest rates are still low, and higher rates won't put on the brakes. |
Many market participants are hoping for the FDP to take on the role of a pacemaker, a force that pushes for reforms, Merkel wouldn't be able to push through her reform program. |
Such strikes are never good for the economy. But in the past strikes haven't halted an economic upswing because in general they are too short to create lasting damage. |
The seasonally adjusted rise was a surprise for everyone. But this month is likely to have been an exception because the rise resulted from an increase in eastern Germany, |