A mood test for Germany AG; Irish budget

October 13, 2015

One of the week’s biggest numbers is out at 0900 GMT with the ZEW report on sentiment in the German economy in October. This could give a first glimpse of perceptions on whether the VW emissions scandal is hurting the wider economy and comes after last week’s data signaling a drop in exports and weak industrial orders, largely down to a slowdown in China and other emerging markets.

It could still be bluff-calling but Portugal’s opposition leader Antonio Costa is looking increasingly serious about wanting to try and form a government with Communist and hard-left parties after the inconclusive election earlier this month. Major policy hurdles remain to such a coalition and Costa’s own mandate is weak after the disappointing performance of his party, yet this is starting to look like a real alternative to a more austerity-minded minority government under incumbent Prime Minister Pedro Passos Coelho. Portuguese shares fell sharply on Monday on the prospect of a prolonged bout of uncertainty and of a left-leaning government reversing efforts to curb the deficit. There could still be a long way to run in this, however; Costa and Passos Coelho are due for a new round of talks today after last week’s encounter proved fruitless.

The Dutch Safety Board is issuing long-awaited findings at 1215 GMT investigation into the crash of a Malaysian passenger plane over eastern Ukraine. It is expected to say it was downed by a Russian-made Buk missile but not who was responsible for firing it.

Ireland’s finance minister will effectively kick off the government’s re-election campaign on Tuesday when he presents his 2016 budget, with a booming economy meaning he can offer to cut taxes and spend more on services. There had been speculation that Prime Minister Enda Kenny would seek to benefit from any post-budget bounce by bringing forward the election from next year, but he pretty much ruled that out at the weekend.


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