Weekly Asset Heatmap

Weekly Asset Heatmap: Germany, Great Britain

Our analysis suggests Merkel is on shaky ground, and a big move may be coming in the pound.

11-21

Germany

Merkel's failure to secure a governing coalition in Germany reveals her position is weaker than expected.

merkel

The Free Democratic Party (FDP) walked out of coalition talks Sunday due to reported divisions over energy, tax policy, and asylum-seekers. Predata’s signals that capture online German-language interest in subjects related to these three areas rose in the days before the talks – an indication that the public was paying attention to them. Attention to immigration and terrorism (the signal in red) last spiked at the beginning of October and led to Merkel agreeing in previous coalition talks to limit the number of asylum-seekers.


That this time Merkel, usually highly-responsive to public attitudes, failed to reach a governing consensus on these key issues suggests her position is weakening. If she calls new elections, the outcome may be worse than anticipated.

Great Britain

A rise in our Bank of England signals suggest a big move in the pound within the next 30 days.

pound

Salient threads in the digital debate over British monetary policy that are driving these signals include:

  • In the first concrete steps of Brexit, the European Medicines Agency and the European Banking Authority are relocating to Amsterdam and Paris, respectively, after three rounds of Eurovision-style voting on Monday.
  • Theresa May is expected to get support to increase her Brexit 'divorce bill' offer to the EU. The new offer is expected to rise to 40 billion pounds.
  • Philip Hammond is set to deliver his most important budget statement this Wednesday.

The argument for a 'Soft Brexit' appears to be benefitting from Tory internal turmoil.

brexit

Though Theresa May has faced insurrectionism from Brexit hardliners within her own party, our signals suggest that the case for a ‘Soft Brexit’ is currently leading the online debate. In theory, conservative infighting could weaken Theresa May’s position with negotiators and result in her yielding to EU demands, such as paying a larger share of the UK’s bill to the EU in the Brexit divorce bill.


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