30.10 - three more years of Merkel
- by Anna K.
Angela Merkel turned Europe upside-down with the statement about her political future.
The end of an era that is going to bring us more political uncertainty than we have seen in a long time. With so many political changes and shifts going on in the world we are always hoping that those who fight for the better of people are going to be with us always. But sadly that is not the case as a lot of politicians simply get tires and want to step away from limelight.
As we discussed yesterday a bad performance of Christian Democratic Union in the local elections in Germany became a reason for Angela Merkel – acting head of the party as well as sitting chancellor if Germany to address its members. And she shocked the crowd by revealing that she is not going to go for another elections as German chancellor in 2021. That means that these 2 years that we have left with her are going to be filled with political and economic changes and turbulences alike.
Merkel is one of the most successful chancellors of Germany. This is her 4th term in the seat. She reached her position of one of the most influential people of the world due to her economic knowledge that, for example, allowed EU to leave economic crisis of 2018 without any consequence. She also managed to uplift euro after the hits were taken.
She is the one negotiating with Putin, May and Trump. She is the reason that euro is not weakened by American tariffs, because there are none for the EU at the moment or they are done to a bare minimum. She supports euro at a current rate and keeps inflation in boards with harsh economic decisions, because let’s face it – Germany is the most important and strong country in Eurozone.
Although her current position was caused by one of her faulty decisions – to let immigrants in. a lot of people are now extremely disappointed with her decision and are looking of ways to reverse what was done several years ago.
And right now, with so much already done we have to look back and try to guess what is going to happen to Germany and the world as it is in the future, after her final term runs out.
Although right now we see that it is impossible to predict who is going to come and occupy the seat as we do not even have the long list of candidates who are going to change Merkel in the position. But it is easy to say that we are going to see changes. And not necessarily good changes.
After all Merkel was holding euro strong for several decades. And now with Brexit nearing to us we are going to have to see to weaken a little bit. Although it is possible that European currency is going to find strength in the weakness of Asian markets, when all of the traders are going to look for something stronger. All and all we have years of uncertainty ahead of us.
As election craze is going around the world we see a lot of political changes in the field. Over the weekend elections took place at at least 3 countries and changes were made in all of them. But of most interest to us now are the presidential elections in Brazil. There the outcome was pretty predictable, although still shocking to a lot of us.
The people of Brazil voted for the ultra-right candidate Jair Bolsonaro. Politician gained 55.1 percent of the votes even though his views are deemed to be extreme. He even got a nickname – tropical Trump – such are his views.
Bolsonaro is a vivid protestor against migrants, is rooting for the death penalty to be brought back and has said that Trump is his political idol. A lot of people think that Bolsonaro is going to be the savior that Brazil with its weak economy and extreme poverty levels needs. And according to the recent news they might just be right.
The results of the election were only announced yesterday, but we already see that trust of the investors in Brazilian economy is starting to go up. Ibovesoa Index is already up by 2.8 percent which is the new historical high. Petroleo Brasiliero SA oil company sees its shared adding 2.4 percent and shares of Banco de Brazil rose 3.2 percent.
With economic growth like that Brazilian national currency real rose 0.5 percent against the greenback towards historic high. Brazilian bonds are also growing and gaining price. As a conclusion we might say that while Asian market sees losses and recoveries that do not seem to stock, Brazil is having a recovery as a contrast for all of the other segments of the market.
Can Bolsonaro really become the savior of Brazilian economy? Well, it might help that traders and investors actually seem to believe in him if they are ready to invest right here on the spot with inauguration being several months away. But we really wouldn’t mind seeing real among the strong currencies. After all it is already expected that major stocks and indices of the country are going to add about 40 percent of the price in the nearest couple of months.
So, what can we say? Watch Brazil extremely closely these couple of months. We are also going to update you on the state of matter in Brazil as it seems that the ride is going to be too interesting to miss.