Overview
Germany’s election results sent the euro lower. While Angela Merkel secured her fourth term as chancellor, the margin in which her party won by was much smaller than in past elections. Merkel’s Christian Democrat party and the Liberal Free Democrats will now form a coalition. The euro is now 0.4% weaker against the dollar.
Equities
European stocks are shrugging off the disappointing election results, trading mostly higher. Germany’s DAX 30 is 0.1% stronger while France’s CAC 40 is flat. The DJ Euro Stoxx 50 is 0.1% higher and OMX 30 is 0.36% higher.
US stocks are more subdued. The S&P 500 has given up 0.09%, the Dow Jones has lost 0.08% and the tech-heavy Nasdaq 100 is down 0.12%.
Commodities
The stronger dollar has weighed on gold. Additionally, concerns over North Korea’s threats have diminished leaving less demand for safe-haven assets. The precious metal is 0.3% lower.
Crude oil is 0.26% lower while Brent oil has dropped by 0.23%. The lack of clarity from the weekend’s meeting of OPEC and non-OPEC allies has forced bearish investors out of hibernation.
Investors were hoping for an extension of production cuts past the deadline of March 2018, however the cartel gave little information on the issue. Russia’s Alexander Novak stated that “I think we can return to this issue not earlier than January next year,”
Forex
Another election sent jolts of volatility into equity markets, this time in New Zealand. No clear mandate was elected, leaving the nation in limbo for the next few weeks. The uncertainty sent the New Zealand dollar 1% weaker against its US counterpart.
The dollar was 0.2% stronger against a basket of its peers. Meanwhile, the pound climbed 0.2% against the dollar. Sterling is now 0.62% stronger against the euro after the disappointing result in Germany.
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