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After the elections

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  • Germany will have to have a change of government. Although Chancellor Merkel's CDU won handsomely, her coalition partners the FDP failed to clear the 5% threshold for Bundestag representation (as did the anti-Euro AfD). However, a new coalition is unlikely to offer radical changes to Euro policies.
  • One of the credit rating agencies upgraded Ireland's credit outlook to positive, mumbling something about fiscal progress. This would be interesting if markets had not already worked out that Ireland had progressed in its fiscal policy.
  • Business sentiment data is out today. From China the HSBC manufacturing PMI validated the official number from last month with a strong showing. In the Euro area the flash PMI figures for manufacturing are forecast to show modest gains in that sector.
  • There are three Fed speakers today, all doubtless trying to add clarity in the wake of last week's policy error by the FOMC. Bullard last week called the decision a "close call". Markets need to know how close "close" actually is.

Listen to the audio version of this briefing.