BDSwiss Marshall Gittler Talks German Elections & Impact on EU Markets
As Europe’s leading economy prepares to elect a new Bundestag in the post-Merkel era, institutional and retail investors are already gearing up to trade the opportunities that will emerge in the forex and EU stock markets before and after the German Elections on September 26th.
Veteran fundamental analyst and Head of Investment Research at BDSwiss Marshall Gittler shares his personal insights, views, and projections on the possible impact of the German Elections on different financial markets.
- Why are this year’s German Elections considered crucial for the EU markets?
Within the European Union, Germany is often seen as the de facto leader and as a key motor for policy and decision-making.
As the pivotal economy in Europe, accounting for nearly 30% of Eurozone GDP, Germany’s future strongly influences both the continent and its currency – the EUR. Under Ms Merkel’s tenure, this influence grew even further.
What makes this election season extraordinary for Europe is the departure of the incumbent chancellor after 16 years in power and the uncertainty on both the national and international level over what exactly comes next.
As Germans head to the polls on September 26 to kick off their Superwahljahr (super election year), the race for the chancellery is wide open — and in the wake of Covid-19 and the aftermath of Brexit — the world will be watching closely to find out in which direction the Germans will take their country.
- Who is leading in the polls? What is the most likely coalition?
The polls show the CDU/CSU party in the lead, but with the Greens, rather than the SPD, in second place. As usual, no party is likely to be in a position to govern by itself.
The focus, therefore, is on which parties are most likely to form a coalition following the elections and how their need to compromise in a coalition might affect the policies.
The possible coalition combinations are often referred to by the pattern that their colours would make. Currently, the only two-party coalition possible seems to be the CDU/CSU and the Greens (the so-called “black/green” coalition).
We believe this is the most likely outcome of the election at the moment. In terms of who will be Merkel’s successor, Annalena Baerbock (co-leader of the Greens since 2018) and Armin Laschet (leader of the Christian Democratic Union and governor of North Rhine-Westphalia) are the two most likely candidates.
- What are the main campaign issues?
Guiding Germany out of the coronavirus pandemic, with a focus on reviving the economy, remains the most pressing issue on the domestic front for both leading parties.
Meanwhile, climate policies will be given a greater sense of urgency after the recent floods, while the greening of the country’s industrial sector is a key issue on the Greens’ agenda.
Of course, both campaigns will also focus on a familiar stew of issues, including digitization, foreign policy, social equality, national security, migration, and EU politics.
- What are the most probable scenarios when it comes to future policies and how can these impact the markets?
A CDU-Greens coalition would have broadly similar policies to the existing government, but with a stronger green agenda as the Greens would seek to extract concessions from the CDU.
This would include a steeper carbon price path, more subsidies for renewables and more public investment in decarbonisation.
On the foreign policy front, the CDU will seek continuity on its current trade policies with China and its positioning on Russia, including the Nord Stream 2 pipeline that is expected to be completed later this year and which will transport natural gas directly from Russia.
Meanwhile, the Greens are against the pipeline.
Most notably the Greens will push for the implementation of higher taxes for top income earners, making the debt brake more flexible, supporting a common EU fiscal policy and reforming the Stability and Growth Pact (SGP) rules (which limit countries’ budget deficits).
While such deep reforms are unlikely to be implemented, we would expect the EUR to depreciate should the Greens secure a decisive parliamentary victory.
- Will anything change regarding the reform of the financial system or management of the euro crisis?
All the major parties share a strong commitment to the EU, the transatlantic alliance, and the euro. Europe can count on the next German government to provide stable, predictable leadership.
A CDU-Greens coalition would most likely result in a reform of Germany’s fiscal rules to allow for more public investment to fight climate change and set the tone for similar policies on an EU level.
Overall, however, the mere fact that Germany’s government will be a centrist coalition means that its European and international policies will be variations of the status quo.
Due to the limits set in the German constitution, the oversight of the constitutional court, and the role of the Bundesrat (Upper House), the scope for large-scale shifts in the overall stance of domestic fiscal policy and of German guarantees for EU-wide borrowing is limited regardless of who gets into power.
Major shifts in policy are usually negotiated and agreed upon between the mainstream parties, both in the ruling coalition and in opposition. Such shifts usually reflect longer processes, not sudden policy reversals when a new government enters office.
Part of that is cultural; part is because of the need for a coalition government, which usually ensures some continuity between governments.
- How will the markets be affected on a long- and short-term basis?
Bundestag elections are held around the same time in September. If we look at how the EUR/USD behaved from the beginning of August until mid-November, we see that in general, the euro has risen in the days leading up to the election, only to lose steam immediately after.
This probably reflects a typical “buy the rumour, sell the fact” reaction: investors buying EUR in anticipation that the CDU will prevail, then taking profits shortly after.
Interestingly enough, the CDU/CSU, the Greens and The Left all favour the introduction of a digital euro by the European Central Bank to guarantee means of payment.
Meanwhile, we will most likely see the German push for more eurozone fiscal stimulus being implemented via a “Germany first” investment agenda (and then have some trickling through effects for the rest of the eurozone), rather than a “euro first” push. This will likely also provide short term support for the DAX.
I believe a CDU/CSU + Greens coalition would be beneficial for the EUR in the long run. Hopes of faster growth could attract money into European stocks, while a left-leaning coalition could result in higher bond yields, which will also make the EUR more attractive.
- How can traders keep up with the markets and major economic events such as the German Elections? What does BDSwiss offer in terms of market research?
Keeping current on important news is now more critical than ever. If there’s anything that the events of 2020 have taught us, it is that market opportunities can arise from the most unexpected and unlikely circumstances.
The difficult part is sorting through all of the available news to get to the updates that are most salient to your investment portfolio.
BDSwiss simplifies this process by offering targeted, timely, and actionable research and information on different asset classes and market sessions through a series of live webinars, daily analysis articles, weekly outlooks, real-time trading alerts, and of course, special reports on major market movers such as the German Elections.
This information is made available for free to everyone, even if they are not ready to invest.
As someone who has been following and analysing the markets for over 30 years and can still be surprised by the turn of events, I can tell you that when it comes to investing, strategy and knowledge are key.
Being able to draw upon the expertise of senior analysts and experienced industry professionals can give you a real strategic advantage when it comes to trading.
At BDSwiss our research and support team are also extremely responsive. It’s something I see daily during our live analysis webinars, with my co-host Frank Walbaum, where we try to simplify and answer questions from traders live.
- How can traders, investors, or institutional partners benefit from reading your German Elections report?
Forewarned is forearmed! It’s essential to understand what’s been happening in the market before you start trading – especially when you are trading during a high impact event such as the German Elections.
Even if the market trades differently than you’ve anticipated, at least you have a set of expectations to measure these trends against and respond to the latest developments.
In my German Elections 2021 Market Outlook entitled “Germany’s election: What it means for Germany and Europe”, I discuss some prevailing forecasts on the key FX and stock market trends that we may expect to see in the EU markets pre- and post-election.
My analysis is based on major Bloomberg consensus estimates, which are derived using median projections statistics by over 18,000 companies, as well as galvanising the projections of dozens of economists and analysts on a global scale.
Of course, these forecasts are just market speculations and personal insights. It’s always important to remember that markets are extremely volatile and hard to predict, and as we saw in recent years, anything is possible.
About the BDSwiss Group:
BDSwiss is a leading financial services group, offering bespoke CFD trading and investment products to more than 1.5 million registered clients, in over 180 different countries.
Since its inception back in 2012, BDSwiss has been providing top-class products, a wide range of platforms, competitive pricing, and fast execution on more than 1000+ underlying instruments including Forex, Shares, Commodities, Indices, and ETFs.
BDSwiss complies with a strict regulatory framework and operates its services on a global scale under a number of different entities.
World Pool Championship: Kelly Fisher in group with Alex Kazakis as Fedor Gorst defends his title
World Pool Championship: Kelly Fisher in group with Alex Kazakis as Fedor Gorst defends his title
Kelly Fisher will meet Alexander Kazakis and Darren Appleton in her group at the World Pool Championship in Milton Keynes
Fedor Gorst will begin his World Pool Championship defence against Estonia’s World Cup semi-finalist Mark Magi in Milton Keynes, live on Sky Sports.
Among the other standout matches for the double elimination Group Stage is recent World Pool Masters champion Alex Kazakis against women’s world champion Kelly Fisher.
Championship League Pool winner faces Italian Mosconi Cup legend Fabio Petroni, while former world champion Mika Immonen will be up against rising star Kristina Tkach.
The tournament begins on June 6 with a two-day Group Stage, with the 128 players split into 16 groups of eight players.
That will reduce the field down to 64, after which the tournament will adopt a straight knockout format.
Group matches are all race to 9, with knockout stage matches a race to 11 except the final, which is a race to 13.
Players who win their first two matches in the group stage advance to the last 64, while players who lose their first two will be eliminated.
Players with one win and one draw will play a third match with the winner advancing to the last 64 and the loser knocked out.
Fedor Gorst is the defending World Pool Championship champion
Fedor Gorst (ROC) vs Mark Magi (EST)
Mark Gray (GBR) vs Julio Burgos (PUR)
Jeffrey De Luna (PHI) vs Dimitri Jungo (SUI)
Konrad Juszczyszyn (POL) vs Jasmin Ouschan (AUT)
Albin Ouschan (AUT) vs Fabio Petroni (ITA)
Roberto Gomez (PHI) vs TBC
Omar Al-Shaheen (KUW) vs Alain Da Costa (FRA)
Aloysuis Yapp (SGP) vs Kaiden Hunkins (USA)
Billy Thorpe (USA) vs Francisco Gatsby (CHI)
Marc Vidal (USA) vs Ivica Putnik (CRO)
Petri Makkonen (FIN) vs Benjamin Belhassen (FRA)
Mieszko Fortunski (POL) vs Marcel Price (GBR)
Thorsten Hohmann (GER) vs Tobias Bongers (GER)
Mika Immonen (FIN) vs Kristina Tkach (ROC)
Sanjin Pehlivanovic (BIH) vs Kevin Lannoye (BEL)
Ralf Souquet (GER) vs Ronald Regli (SUI)
Jayson Shaw (GBR) vs Moritz Neuhausen (GER)
Jani Siekkinen (FIN) vs Michal Gavenciak (CZE)
Ruslan Chinakhov (ROC) vs Alex Montpellier (FRA)
Marc Bijsterbosch (NED) vs Imran Majid (GBR)
Casper Matikainen (FIN) vs Elliot Sanderson (GBR)
Mark Foster (GBR) vs Jan van Lierop (NED)
Mohammad Ali Berjawi (LEB) vs Vladimir Matvienko (ROC)
Max Lechner (AUT) vs Mickey Krause (DEN)
David Alcaide (ESP) vs Andreja Klasovic (SRB)
Pijus Labutis (LTU) vs Jeremy Sossei (USA)
Robbie Capito (HKG) vs Ruben Bautista (MEX)
Denis Grabe (EST) vs Vitaliy Patsura (UKR)
Skyler Woodward (USA) vs Jaroslav Polach (SVK)
Radoslaw Babica (POL) vs Ivo Aarts (NED)
Vincent Halliday (RSA) vs DJ McGinley (CAN)
Daniel Schneider (SUI) vs So Shaw (IRI)
Shane van Boening (USA) vs Petr Urban (CZE)
Oscar Dominguez (USA) vs Roberto Bartol (CRO)
Karol Skowerski (POL) vs Jonas Souto Comino (ESP)
Hunter Lombardo (USA) vs Mats Schjetne (NOR)
Wojciech Szewczyk (POL) vs Marco Dorenburg (GER)
Richard Halliday (RSA) vs Aleksa Pecelj (SRB)
Oliver Szolnoki (HUN) vs Daniele Corrieri (ITA)
Francisco Sanchez-Ruiz (ESP) vs TBC
Eklent Kaci (ALB) vs Lukas Fracasso Verner (USA)
Stephen Holem (CAN) vs Badar Alawadhi (KUW)
Yukio Akagariyama (JPN) vs Ricky Evans (USA)
Corey Deuel (USA) vs Benji Buckley (GBR)
Darren Appleton (GBR) vs Shane Wolford (USA)
Marco Teutscher (NED) vs Christoph Reintjes (GER)
Ricardo Sini (ITA) vs Jeff Nieuwenhuyzen (AHO)
Alexander Kazakis (GRE) vs Kelly Fisher (GBR)
Niels Feijen (NED) vs Tim de Ruyter (NED)
Chris Robinson (USA) vs Yip Kin-Ling (HK)
Nick Malai (GRE) vs Veronika Ivanovskaia (GER)
Masato Yoshioka (JPN) vs Muhummed Daydat (RSA)
Mateusz Sniegocki (POL) vs Miguel Silva (POR)
Mario He (AUT) vs Philipp Stojanovic (CRO)
Jakub Koniar (SVK) vs Vania Franco (POR)
Tyler Styer (USA) vs Henrique Correia (POR)
Naoyuki Oi (JPN) vs Jennifer Barretta (USA)
Roman Hybler (CZE) vs Daniel Maciol (POL)
Donny Olson (USA) vs Bahram Lotfy (DEN)
Chris Melling (GBR) vs April Larson (USA)
Tomasz Kaplan (POL) vs Sergey Lutsker (ROC)
Chris Alexander (GBR) vs Nikos Ekonomopoulos (GRE)
Wiktor Zielinski vs Kim Laaksonen (FIN)
Joshua Filler (GER) vs Margaret Fefilova (BLR)
For those on the move, we will have the Snooker & Pool season covered via our website skysports.com/more-sports, our app for mobile devices, or our Twitter account @skysportspool for latest news and reports.
HKFC PSA Preview: Chan Sin Yuk Seeing Progress
The Hong Kong Football Club PSA takes place this week from Wednesday 16 to Saturday 19, with 32 players aiming for glory over the course of the next four days of play.
31 of the 32-strong field hail from Hong Kong, due to the ongoing COVID-19 pandemic, with Singapore’s Paige Hill as the only foreign player in the draw, as players entering the event have to reside in the nation.
The men’s event will be headed by Tsz Fung Yip, who won the second of the Chairman Cup events at the Hong Kong Squash Centre earlier this year. The likes of Max Lee, Henry Leung, Tsz Kwan Lau and Chi Him Wong, also a winner this year, will be aiming for the title.
Liu Tsz-Ling, the World No.41, will be the top seed for the women’s event, with Tze Lok Ho, Tsz Wing-Tong, Lee Ka Yi and Vanessa Chu, all within 20 places in the World Rankings of Liu, also in action.
The No.6 seed will be Chan Sin Yuk, who sensationally claimed victory at the Chairman Cup 2 earlier this year, downing three of the top five seeds en route to the victory. We caught up with the 18-year-old ahead of this week’s event.
“I was happy about that [the win]. I turned full time about half a year ago. The Chairman Cup and Chairman Cup 2 were my first two tournaments since then. I can see the progress from six months ago to the Chairman Cup and to the Chairman Cup 2,” she explained.
“I worked really hard, and my coaches also always reflect on my performance and work well with me to improve my weaknesses. So I am very thankful to them for winning my first title.
“I think I performed pretty well throughout the week. I was able to put what I have been practising into my game. I managed to persist through matches after I had had some tough rallies with my opponents. I wasn’t able to keep a clear mind all the time but I am happy with how I played overall and that I came through to get the win against three of my seniors.”
Thanks to the victory, Sin Yuk jumped up to sit just outside the top 100 in the World Rankings, now at World No.114. She knows another win would likely take her past that mark, and she is confident of doing just that this week.
“I am confident with my recent training, but things change all the time in a game, and it’s never easy to get through all the top seeds and win a title. I will try my best to win this tournament for a second Tour title.”
The event takes place from Wednesday 16 to Saturday 19 June at the Hong Kong Football Club. Follow the PSA Challenger Tour on Twitter and Facebook for daily updates from the event.
Action from the event will be streamed throughout the week on the PSA Challenger Tour YouTube channel, where you can watch Challenger Tour action, and interviews with rising stars.
Men’s First Round Draw: Hong Kong Football Club PSA
 Tsz Fung Yip (HKG) v Au Lap Man (HKG)
Ho Ka Hei (HKG) v  Mathew Lai (HKG)
 Chi Him Wong (HKG) v Wailok To (HKG)
Lam Shing Fung (HKG) v  Tsz Kwan Lau (HKG)
 Henry Leung (HKG) v Tang Ethan Pui Lok (HKG)
Tse Jat (HKG) v  Harley Lam (HKG)
 Tang Ming Tong (HKG) v Anson Wong (HKG)
Chung Yat Long (HKG) v  Max Lee (HKG)
Women’s First Round Draw: Hong Kong Football Club PSA
 Liu Tsz-Ling (HKG) v Paige Hill (SGP)
Fung Ching Hei (HKG) v  Vanessa Chu (HKG)
 Tam Mariko Cho Nga (HKG) v Wai Sze Wing (HKG)
Valerie Huang (HKG) v  Tsz-Wing Tong (HKG)
 Lee Ka Yi (HKG) v Alyssa Ho (HKG)
Carmen Lee (HKG) v  Chan Sin Yuk (HKG)
 Cheng Nga Chin (HKG) v Wong Po Yui Kirstie (HKG)
Toby Tse (HKG) v  Tze Lok Ho (HKG)