Shares and Bonds Creep Up After Merkel’s Election Win

Merkel’s electoral victory in Germany has helped to assuage recent worries concerning the policy stance of the Federal Reserve. The elections that recently took place in Germany appear to be a form of support for the policies and type of leadership endorsed by the candidates.

With anxiety and uncertainty following the crisis in the euro zone, electors clearly favor a leadership style that is forward in its thinking and consistent.

In September, the PMI (Composite Purchasing Managers Index) increased dramatically to 52.1 from the previous month which was at 51.1. This number is higher than optimistic expectations. In fact, new orders are increasing at the fastest rate in the past two years.

Suggestions that the U.S. federal bank would be pulling support rather soon caused worry over the direction of the market and caused marked uncertainty. However, the market was pleasantly surprised to find that the support was not cut short.

Though stocks in Europe are the highest they’ve been in five years, and Merkel’s win has sparked optimism for the future of the Euro, the lift that it’s gotten is not going to be permanent.

There is still a lot of bureaucracy for Merkel to get through and compromises to be made, which could take up to a month. Still, the fact that Merkel was elected serves as a symbol for the endorsement of efforts and plans for the euro to be preserved.

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