Euromarkets were soothed by German socialists’ decision to join the country’s conservatives in a coalition government that will be headed by current Chancellor Angela Merkel. The DAX moved in line with other EU equity indices, while 2-year, 10-year and 30-year Bund yields fell to -0.572%, 0.651% and 1.255%.
The Social Democratic party on Sunday voted to join with Merkel’s Union parties (CDU/CSU) by a majority of 66%, 5 months after elections. They also approved an increase in Germany’s contribution to the EU budget. Merkel will start a fourth term as Chancellor, maintaining her policies and confirming Germany’s leadership in Europe.
By Vincent Mivelaz