CNBC Daily Open: German right wing wins election, Ukraine stalemate

Hello, this is Leonie Kidd from London.

Although the state is small, its influence is large. Voters in the German state of Saxony-Anhalt have surged in support for the right-wing party AfD, dealing a blow to Chancellor Friedrich Merz and causing a political shock.

Investors will assess other key risks this week, from Ukraine to air travel, but President Donald Trump’s pressure on the Federal Reserve will keep markets on edge.

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The Alternative for Germany (AfD) party has won a historic victory in the Saxony-Anhalt state election. The result will bring far-right parties closer to an absolute majority at the state level for the first time since World War II.

According to exit polls on Sunday, the AfD won 44.4% of the vote, followed by Chancellor Friedrich Merz’s conservatives with 18.3%, while the centre-left Social Democratic Party and the Green Party both met the minimum threshold to enter parliament.

Ulrich Sigmund, the AfD’s leading candidate in Saxony-Anhalt, is campaigning on a promise of strict immigration policies, abandoning the euro and reconnecting with Russia.

President Trump’s special envoys, Jared Kushner and Steve Witkoff, spent the weekend in Moscow and Kiev in an effort to break the stalemate in the war between Russia and Ukraine.

Despite a three-hour meeting with Russian President Vladimir Putin on Saturday, the Kremlin said it was unable to resolve the situation.

Meanwhile, Ukrainian President Volodymyr Zelensky said at a press conference after the talks in Kiev that the territorial issue should be discussed “at the leadership level.”

Investigators are looking into the circumstances behind the crash of an Amazon cargo plane at a Miami airport on Sunday, killing five people and seriously injuring others.

The 32-year-old Boeing plane overran the runway around 2 p.m. ET and crashed into a vehicle on the airport’s business road.

As of Sunday, more than 160 flights had been canceled and more than 325 delayed as a result of the incident.

Meanwhile, in Southeast Asia, hundreds of flights have been disrupted by a volcanic eruption in Indonesia.

Volcanic ash from the eruption of Mount Anak Krakatoa wreaked havoc on the aviation industry, affecting flight schedules across the region over the weekend.

U.S. markets fell on Friday after a surprisingly strong August jobs report, with trading in the U.S. closed for Labor Day. The data fueled further speculation that the Fed could consider raising interest rates at its next meeting, but President Trump renewed his threat by saying he could cut trade with major U.S. partners if the Fed doesn’t cut rates.

In Asia, stock prices rose during trading on Monday, led by technology stocks.

Isar Aerospace became the first commercial group from Europe to launch a rocket into orbit. The Spectrum rocket launched the satellite into orbit.

Join “Squawk Box Europe” to talk with Isar Aerospace about the company’s milestones.

— Leonie Kidd

Sugar has outperformed the stock market this year.

Sugar sweetness is significantly reduced for buyers.

Sugar prices rose 21.5% in August, the biggest monthly increase since October 2010, when they rose 24%. The United Nations Food and Agriculture Organization’s food price index also rose in August, following a broad rise led by sugar.

“The surge reflects expected lower sugar beet yields in the European Union due to adverse weather conditions, concerns about the impact of El Niño on production prospects in major Asian producers, lower sugar production in Brazil, and India’s announcement of duty-free imports of raw sugar,” the group said in a recent report.

— Dina Zaidi