German instability drives volatile start to week
|The prospects of a snap election in Germany has sparked downside for the likes of the euro and DAX, while the housebuilders provide a boost to the FTSE ahead of Wednesday's budget
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German political instability ensures volatile start to the week
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Could German uncertainty stunt Brexit progress?
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House builders boost FTSE ahead of the budget
It was expected to be a largely quiet start to the week, but the collapse of the ‘grand coalition' talks in Germany meant it has been anything but. Early losses across the likes of Germany's DAX index and EURUSD have been largely erased, but the prospect of another election in Europe's biggest economy could see political uncertainty weighing on the euro going forward.
The situation in Germany will be closely watched in Whitehall. While the UK had hoped that business-minded Germany would help enable a beneficial deal for all in Brexit talks, a weaker and less decisive Angela Merkel in the coming months provides yet another hurdle for the UK Brexit story.
The FTSE 100 is being boosted by the house builders this morning, with Wednesday's budget expected to be dominated by the government's attempts to fix a housing market that has too few new houses being built. With Labour holding the vote for younger parts of the country, Wednesday's budget is likely to focus on getting more first time buyers onto the property ladder. This focus on the housing sector should see the government ensure a ramp up in the number of houses being built each year.
Ahead of the open we expect the Dow Jones to open 36 points higher, at 23,322.
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