Economy

Support for AfD likely not big enough to weigh on the euro

The euro is likely to rise when this week's trading begins overnight due to the results of the German election, writes Bloomberg. What has been considered to be able to put pressure on the currency is a scenario in which the far-right AfD party becomes larger than the opinion polls indicated. But that does not look like it will be according to the polling stations.

The market's focus now shifts to Friedrich Merz's government formation 

Economist: No Musk effect - is a relief for Europe

According to the polling stations, the German election does not look like it will offer any major surprises, notes SEB economist Robert Bergqvist. However, what the basis for the government will look like is still unclear and it may be determined by how the smaller parties fare.

“Hope now that Berlin can translate Germany’s fundamentally strong ‘balance sheet’ into structural reforms,” Bergqvist writes on X.

At the same time, he describes it as a “relief for Europe” that Elon Musk’s involvement does not appear to contribute to any major injection for the far-right AfD party.

The outcome will have great significance for the business community: “Could be positive surprises for the stock market”

On Sunday, Germans go to the polls, and the outcome could have great significance for the business community. That is what DWS investment manager Vincenzo Vedda believes, according to DI.

“More deregulation and reduced redistribution of wealth could be positive surprises for German stock valuations,” he writes in a comment.

The CDU is expected to win according to opinion polls, but coalition negotiations will be crucial. A quick government formation could strengthen the market and the euro, Vedda emphasizes. The CDU’s proposal to lower corporate tax could benefit DAX companies such as Porsche and Deutsche Bank.

Sources: Easing sanctions not a sticking point for Putin

Easing sanctions is not crucial for Russia in the ongoing peace negotiations, sources tell Bloomberg. However, relief for oil tankers and banks is said to be at the top of the Russian wish list.

At the same time, Donald Trump has threatened additional measures over the past month, such as working to drive down oil prices in order to harm the Russian economy.

But additional sanctions are unlikely to affect Vladimir Putin, says Alexandra Prokopenko, a partner at the Carnegie Russia Eurasia Center.

“There is no sanctions bazooka anymore,” she says.

In recent years, the G7 countries have imposed historically extensive sanctions in response to the full-scale invasion of Ukraine. However, Russia has adapted unexpectedly well and its economy has withstood better than experts had expected.