Political instability in Germany is assuming increasingly threatening forms, as the current Chancellor Angela Merkel was forced to agree on a early election, rather than forming a government in the minority.
Distrust of Merkel began to grow rapidly after the decision to open borders for more than 1 million migrants. In the September elections, a high percentage of approval was given to the far right, which made it more difficult for the chancellor to retain power. Investors hastened to reduce their positions on European shares, while the Euro fell to an eight-day low against the Pound sterling, as the growing political crisis in Germany crossed borders and is advancing to European assets. Unpredictability will continue to be a matter of concern for investors, given Germany’s critical role in the European Union.
The oil market is preparing for OPEC meeting next week, where the largest oil producers are expected to make a decision to extend production cap as opposed to growing oil supplies from the US. The agency Westwood Global Energy predicts that growth in US crude output may exceed the pace calculated on the basis of the number of oil rigs, the number of which increased from 316 from mid-2016 to 738 last week.
Members of the Board of the Bank of England expressed their differences on Tuesday about the recent increase in the Central Bank interest rate for the first time in a decade. The subject of the debate was the study of the relationship between low unemployment and the rate of inflation. A strong labour market, including wage growth, made it possible to tighten policies, but now the Central Bank is in for a long period of dovish stance, especially in the light of the difficulties of getting out of the EU. GBP/USD has barely grown to the level of 1.3250, while against the Euro the Pound grew much stronger, which indicates a change in sentiment on the European currency to bearish.
Chicago futures exchange CME reported on Monday that the company plans to launch bitcoin futures, but the exact date of the event – December 11, is listed on the site by mistake. BTC/USD sank to the level of 7.800 but quickly recovered to 8.230 on Tuesday.