ETF Snapshot: European Large-caps Haemorrhage €7bn As SPD Members Revolt On Proposed German Coalition

SPD leader Martin Schulz and Merkel agreed a blueprint last week, which, if accepted by the SPD on Sunday, will allow formal negotiations to begin. However, it is being met by fierce opposition.

SPD's youth leader Kevin Kühnert has said the blueprint will drive the party into extinction, according to The Times. 

Merkel was forced to look to the SPD party after her attempts to form a coalition with the FDP and the Green party fell apart in November.

The Chancellor, who has been in power for 12 years, has been looking for a way to form a government since the German elections in September, where she won only 33% of the vote compared to the 42% she gained in 2013.

European large caps posted outflows of €6.8bn in the first week of the year, significantly more than the €502m outflows seen in the week ending 21 December.

Across the rest of the equity market, small caps were also in the red, recording outflows of €737m while global stocks saw strong inflows of €1.7bn.

Investors continued to remain bullish about the prospects of US equity markets following President Donald Trump's $1.5trn tax reform with US large caps posting €894m inflows.

Developed investment grade bonds and developed government bonds were both in the black witnessing €1.2bn and €703m inflows respectively while developed high yield bonds saw the strongest inflows of the week in fixed income with €1.4bn flows.

In the emerging markets space, Asian large caps and emerging stocks both saw positive flows of €27m and €1.6bn respectively while emerging bonds posted inflows of €1.1bn.

TrackInsight's data covers both US and European-listed ETFs that together make up around 70% of the total market.