Such strikes are never good for the economy. But in the past strikes haven't halted an economic upswing because in general they are too short to create lasting damage.
A grand coalition would be perceived negatively by the markets. It would be unlikely to push through any reforms because the parties hold contradictory positions and would neutralise each other.
European production could pick up in the first quarter, with Germany doing better than its neighbors. Interest rates are still low, and higher rates won't put on the brakes.
All this suggests that the ECB is in no hurry to hike interest rates. A move in February can effectively be ruled out.
Many market participants are hoping for the FDP to take on the role of a pacemaker, a force that pushes for reforms, Merkel wouldn't be able to push through her reform program.
As long as they are rising, the ECB tends to raise interest rates.
After today's council meeting the European Central Bank sent a less hawkish statement compared to market expectations.
As a result, we expect that the German economy will continue to grow by a mere 1 percent on average in the years to come, ... the German election results lower the pressure on other European countries to implement major economic reforms.
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