Trial now
EURJPY TECHS

Firm Within Its Bull Channel

USDJPY TECHS

Monitoring Trendline Support

EURGBP TECHS

Testing Support

Sign up now for free access to this content.

Please enter your details below and select your areas of interest.

After yesterday's decision by the presidium of the centre-right Christian Democratic Union (CDU) to back party head Armin Laschet to be the chancellor candidate for the 'Union parties', the minister-president of North Rhine-Westphalia has emerged as the favourite to emerge as the next German chancellor.

  • Data from betting site Smarkets.com shows bettors (albeit UK based) shifting money towards Laschet over head of the CDU's Bavarian sister party - the Christian Social Union (CSU) - Markus Soeder (see chart below):

Chart 1. Implied Probability of Becoming Next German Chancellor, %

Source: Smarkets, MNI

  • While the above market is not particularly liquid, it shows a significant shift towards Laschet and away from Soeder in the last 24 hours, implying expectations that the CDU backing for Laschet may be enough for him to become the centre-right's chancellor candidate.
  • The decision by the CDU presidium is a risky one. Laschet sits way behind Soeder (as well as likely chancellor candidates from the Greens and Social Democrats) in opinion polls gauging preferred chancellors, who voters think would be most suited to the role, and overall approval ratings.
  • Putting Laschet on the ballot could raise the prospect of the CDU being dumped out of power in September, with a 'traffic light' Greens-Social Democrat-Free Democrat coalition coming to power.
  • There is no set timing or procedure for the Union parties to decide on a chancellor candidate, but media reports have suggested a decision could come as early as the end of the week.