This year has been eminently electoral in the old continent and the journey of the polls ends this September in Germany. Precisely in the locomotive of the European economy. Due to the results predicted by the different electoral polls, it is not being reflected in the equity markets. As has happened in the past months with the electoral processes developed in Holland and France. Of course, this is good news for the interests of small and medium-sized voters.
The incidence of these elections in Germany is such that its results will be reflected in all stock indices of the euro zone. Of course also, and a lot, in Spanish equities. Because indeed, the dependence on the German economy is very remarkable. Anything that happens in Germany is immediately transferred to the rest of the financial markets of the continent. In a very notable way and even with the effects amplified by the impact it has on their economies.
Of course the elections in Germany will be very important. Not only for the Germans themselves but for the rest of Europeans. But very especially for the interests of listed companies. Precisely this is the real reason why the expectation is maximum in financial environments, and very specifically in the stock markets. Not in vain, the sign of the German government will be of special relevance for the coming years. With different variables that a priori are raised about the electoral scenario of the Federal Republic of Germany.
Germany: importance in the stock exchanges
On this occasion, it seems that there will be no surprises of any kind at the polls in the German cities. All the electoral polls suggest that the Chancellor Angela Merkel He will continue for another four years at the helm of the German executive. The only thing left to do is decipher what type of coalition it will be with, since the possibilities are vast: social democrats, liberals or even the greens can this time be your traveling companions to mark the destiny of the European Union for the next few years. And in this sense, the financial markets will undoubtedly have the last word with rises or falls in the stock markets.
In the opinion of the different analysts of the financial markets, the only uncertainty that can be generated in these important elections is that the groups against the euro have strong representation in the German parliament. Even with the possibility that they can indirectly influence the economic policy of this relevant Central European country. In any case, there are only a few days left to know the results and the stock markets are showing a stability that predicts that everything will remain the same after this electoral appointment on European soil.
Markets do not anticipate changes
One consequence of the evolution of the different bags is that a Merkel win is discounted. Anything other than this scenario would be a big surprise and would have a clear reflection in the equity markets. For this reason, moderate hikes It is the general trend in all the stock exchanges of the continent, including the Spanish one. They do not doubt that this is finally the result of these decisive legislative elections. If in the end it occurs, it will not have much impact on the markets. If anything, a few sessions continued with the indices rising, but nothing more.
Another very different thing is that Angela Merkel was defeated at the polls. Because indeed, then yes, the sinking in the bags could be more than remarkable. With a very important correction in the price of the actions of almost all the values. It is something unlikely but it can still happen. Because it would be very bad news for all investors who would see an opportunity to exit the equity markets. Where the short positions would be imposed with crystal clear on the buyers. Factor that would make it very necessary to stay away from the stock markets, at least in the short term.
Financial assets benefited
The continuity in the German government, as we have said, it would not have an excessive impact on the bags. But on the other hand, yes in other financial assets, some of them of great importance. This is the specific case of German bonds that would benefit greatly from this scenario. It would be an excellent time to position yourself in this financial product, even from very aggressive operations to try to make the savings profitable from that moment.
Of course, one of the options to position yourself in this class of fixed income would be investment funds based on this important financial asset. Through different investment models that may be selected based on the profile presented by small and medium investors. From the most aggressive to the eminently more defensive. All of them fall into this group of savers who will be more receptive to hiring this kind of financial products.
Sectors with upward potential
Although equities would not show much excess of optimism, there are a number of sectors and stocks that would gather the confidence of the markets. We refer mainly to representatives of the banking sector. They could develop an upward movement to salute these election results in Germany. But not only affecting the financial groups of this country, but of the entire European continent. Where Spanish banks could have a more than interesting evolution as of September. Especially large groups such as, BBVA and Santander.
Another of the sectors that could come out very well in this electoral process is that linked to the cyclical values in general. Its behavior in the financial markets could be much better than the rest. To the point that he would be in a better disposition to achieve his highs for the year. It would be another of the business opportunities that would be generated from these elections in September. Because in effect, its potential for appreciation will be higher than other securities or more defensive sectors of the equity markets. With a higher disposition to open positions in them from those moments.
Movements in currency markets
Without a doubt, the currency markets would be other of the great protagonists of this electoral day. Where the single European currency, the euro, would revalue compared to its major competitors. Especially against the United States dollar or even more virulently with the pound sterling. The movements in these important markets will be very strong and with greater activity than at other times this year. With the advantage that you can benefit from these moments.
However, risks that involve these kinds of operations are more important. For this reason, only if you have extensive experience in this kind of movement will you be able to open positions. With the aim of making your savings profitable more efficiently and with returns higher than those that equities will offer you during the last part of this year. Because if this scenario is fulfilled, you cannot doubt that the euro will have a lot to say in the investment world. More than other financial assets of special relevance in other periods of the year.
No novelty in traditional fixed income
With regard to this class of products that are represented by fixed-term deposits, bank promissory notes and high-yield accounts there would be no noticeable news regarding the interest rate that will be applied from September. They will keep the same constants as up to now and with hardly any differences worth mentioning. From this scenario, this situation will not affect you at all in the elections to be held in Germany. Because everything will remain completely the same, even if there were some surprises in the vote count.
In any case, you will have no choice but to be very attentive to its outcome if you want to obtain a better return on your savings. Though it will have to be through quick operations they will need your reflexes from a financial point of view. Because indeed. These movements probably won't go beyond a few days or weeks at best. Without affecting your positions too much. In any case, it will be a date to watch over the next few days and on which you should base yourself to select your investment portfolio for the next few months. In this sense, it will be very convenient that you do not make any mistakes that can weigh down your money these days.
Because the elections in Germany, being very important, it does not seem that they are going to hold any special surprise. And in this sense, the continuity of financial markets seems to be the general trend of all financial markets. Both in fixed and variable income, as well as in alternatives. Where new buying opportunities will surely arise in some of them. These are where you have to go from now on if you want to make the savings return from the holidays. Because you cannot forget that the elections in Germany are waiting for you.