For years, Merkel has remained firm but fair. She condemned scores of sexual assaults at Cologne’s New Year celebrations and a series of attacks in Bavaria over the summer, all of which had some asylum seeker involvement. But her appeals not to conflate individual asylum crimes with the entire asylum population is wearing thin with many Germans as the year ends with another series of horrifying crimes.

A young Afghan man is accused of raping and murdering a 19-year-old woman in Freiburg, near the Black Forest. This week Germans were perplexed and horrified by news of a foiled attack on a Christmas market in southwestern Ludwigshafen by a 12-year-old German-Iraqi boy.

Populist pied pipers
Those high-profile incidents have catalysed an already darkening mood towards Germany’s new arrivals and German mainstream politicians are torn between whether to challenge the populist pied pipers or join them.

Far less reported, of course, are the by now daily attacks on asylum seekers and refugee homes, particularly in Germany’s east. But in the seething, post-factual social media cesspool, where every crime carried out by an asylum seeker or refugee is multiplied by many more fictional incidents, Christmas has come early for the far-right Alternative für Deutschland (AfD).

Days after agreeing a programme of “targeted provocation” to maximise support in next September’s federal elections, senior AfD leader Marcus Pretzell wasted no time putting theory into practice on Monday night. Just an hour after the attacks, he tweeted that the Berlin victims were “Merkel’s dead” – and was promptly told by others to “shut your brown mouth”.

Merkel is on the defensive as she heads off for Christmas and into an uncertain new year, her already complicated fourth term election bid in 2017 now considerably more difficult.

Eoin Treacy's view

The German electoral system is designed to ensure a host of small parties cannot gain access to the Bundestag which means power tends to be shared between a relatively small number of major parties. A challenge for the Alternative for Deutschland is that while it has been successful in gaining support in regional elections it does not yet have the critical mass to secure places in the Federal Lower House. 

That is likely to change with the German election in late 2017 and even a lurch to the right by the CDU may not derail it. That does not mean the next Chancellor will be from the far right but it does mean they will have a negotiating chip when the next Chancellor is chosen. Right now Angela Merkel’s reign is looking precarious. 

As a total return index the DAX tends to outperform its counterparts over the medium-term because dividends are assumed to be reinvested. The Index has been ranging above the trend mean since August and broke out three weeks ago to reassert demand dominance. A sustained move below 10,500 would be required to question medium-term scope for additional upside. 

The MDAX of Mid-Caps appears to be in the process of completing an almost two-year range and moved to a new all-time high today.