Merkel desperately tries to form alliances
There are rumours circulating that Angela Merkel could be replaced by Germany’s defence minister, Ursula Von Der Leyen. Germany is losing faith in Merkel’s ability to form a coalition.
Merkel failed to build a coalition following her narrow victory in the election in September. She was attempting to unite her Christian Democratic Union (CDU) party, the Free Democratic Party (FDP) and the Greens, which was dubbed the “Jamaica alliance”.
Merkel is currently trying desperately to from a government with the Social Democratic Party (SDP). The electorate is losing faith, some of the latest polls have shown that 46% wish her to step down immediately.
Political uncertainty historically weakens the currency in question, but with Ursula Von Der Leyen potentially gaining power this does not bode well for Sterling.
Von Der Leyen is a firm believer in a in a federalised United States of Europe, she grew up in Brussels and is the daughter of Ernst Albrecht, former director general of the European Commission.
There is also the possibility she will attempt to strengthen the alliance with French President Emmanuel Macron as Von Der Leyen shares his views on reforms to integrate the Eurozone.
This is definitely not good news for the Brexit process and could make matters even more problematic.
Eurozone CPI Data could bring a change in monetary policy a step closer
Consumer Price Index (CPI) is a measure of inflation with a region and is key to the health of an economy. We have seen positive data out of the Eurozone of late and there is talk a change in monetary policy could be on the cards an increase in inflation could bring that change a step closer. There is expected to be a slight drop, but I am going to go and go against the grain on this one as I believe there is the possibility of an increase.
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