Merkel's party loses to both the far left and the far right
The great secular trend in the world right now is the divergence of politics and the collapse of the middle.
The German state of Thuringia held a vote on Sunday and the results are in:
- Merkel's Christian Democrats: 22.5%
- Far left Die Linke 29.5%
- Far right AfD 24.0%
- Social Democrats 8.5%
- Greens 5.5%
- Free Democrats 5.0%
In the previous election in 2014, Merkel's party had 33.5% of the vote.
The result will make building a coalition difficult as the AfD surge continues. More importantly, the split shows how politics globally continues to diverge. Merkel has been the central force holding the European project together but the old centrist parties in Europe and elsewhere are fading.
There was a time when politics was a minimal factor in markets but it's increasingly the only game in town.