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Topic of the week: Recap
In the past four weeks, we have been attuned to the internet in Germany. Every tweet, hashtag, public comment and blog was carefully examined to gauge what people in Germany think as they head to the polls.
Overall, we checked more than 150,000 tweets and over 40,000 online articles. That is a lot of data. How does one make sense of it? We could count and interpret every message one-by-one, which admittedly is very painful. Or we could team-up with leading experts who apply the power of artificial intelligence (hint: we did the latter).
Together with researchers of the social media lab of EPFL Lausanne, we focused on four economic topics that may determine the outcome of this year's Bundestag election: climate change, unemployment, housing and inflation. We then modeled every statement in real time to reflect a traditional poll – all without asking a single question.
As a matter of fact, if social media voted for the German parliament today (19 September), it would look like below.
Every week, together with the EPFL Social media lab, we explore what's on people's minds in Germany by making use of artificial intelligence techniques to analyze opinions in real-time. Our Chief Investment Officer for Germany, Max Kunkel, discusses these key election topics and what they mean for investors.
Zustimmungswerte der Parteien
Quelle: EPFL, UBS, 18 September, 2017
Quelle: Emnid, 16 September, 2017
Notice the difference between FDP and AfD versus traditional polling techniques (Emnid in this example, 16 September). It seems that smaller parties benefit at the expense of the larger ones – or social media simply loves them more.
Another interesting observation is the disconnect between social and traditional media when it comes to the discussed topics. Long-term issues, such as climate change, were discussed with greater frequency and passion on social media.
In a way, this nicely reflects the current debate in politics, where the proposed party programs offer only short-term solutions. Or does anyone still remember the debate on 3 September?
Overall, we assign a 90% chance of Merkel winning the election and retaining the chancellorship for a fourth term. No surprise here. But it will still be interesting to turn on the TV on Sunday evening, because the race for the other parties is still undecided. Which coalition will rule Germany – and does this bring fresh impetus to greater European integration?
You draw it
German Election Watch for investors
Our most important research
Opinion polls point firmly to Angela Merkel retaining the chancellery following Sunday's election. As the SPD continues to lack traction shortly before the election, we have raised our probability of Merkel retaining the chancellery from 85% to 90%.
Although a grand coalition remains our base case (CIO estimate: 60%), uncertainty is much higher when it comes to the CDU/ CSU's future coalition partner.
In this note we have drawn up a set of questions and answers based around the different coalition scenarios and implications these political unions may have.
Recent opinion polls suggest an 85% chance for Merkel to retain the chancellery.
Multiple coalition scenarios imply different economic consequences for Germany as well as partly opposing consequences for European integration, which is expected to accelerate in the coming years.
That said, potential coalition partners may seek the finance minister's post, which could affect the stance on the Eurozone periphery as well as the choice of the ECB president in 2019.
The latest polling still suggests a 75% probability of Merkel retaining the chancellery. But the odds of a grand coalition are markedly lower (60%) given several coalition options.
The polls suggest a marked shift to the right of the political spectrum by voters since the last election, with the FDP arguing for a Greek exit from the euro.
So the German election outcome will likely have an impact on Greece's planned bailout exit next summer.
Recent opinion polls suggest increased uncertainty in the aftermath of the 24 September elections, as the CDU/CSU (expected to capture most votes) may be able to form a coalition with either the FDP or Greens given their rise in recent months.
Multiple coalition scenarios imply different economic consequences for Germany as well as partly opposing consequences for European integration.
What is more, potential coalition partners may seek the finance minister's post, which could affect the stance on the Eurozone periphery as well as the choice of the ECB president in 2019.