Possible scenario
Early Federal Election
22% Chance
Merz loses the political room to govern and asks Federal President Frank-Walter Steinmeier to permit an early Bundestag election after a failed confidence process. This is a material political shock for Germany, but still not a systemic European crisis unless the AfD gains a governing path.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Finance -1.0%
- Industrials -0.8%
Portfolio impact
S&P 500-0.5%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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