Coalition talks and inflation take spotlight
Published 11/04/2016 | 02:30
Will we get a government this week? It's easy to dismiss this as a political question and point out that the country has been managing fine in the six weeks we haven't had anything more than a nominal taoiseach.
But there are growing signs that things aren't getting done because there is nobody in a position to sign off on decisions. Last week developer Richard Barrett warned his Bartra Capital was holding off plans to build social housing until he knew what the Government would be, while there is growing disquiet in Government departments about the lack of things being signed off by ministers. As talks between Fine Gael and Fianna Fail ramp up, it is becoming more and more clear - we need a government formed or an election.
Away from Ireland, with the world economy entering a more uncertain phase and the top central banks sounding ever more cautious, attention may turn in the coming week to signs of whether years of aggressive stimulus have yielded any significant rise in inflation.
The US Federal Reserve, the Bank of England and the European Central Bank all have been disappointed to varying degrees about how little inflation has picked up, or indeed how it has spent too much time going the opposite way.
It seems the fall in unemployment in the United States and Britain, and to a lesser extent the euro zone, is starting to slow. In the euro zone, where the European Central Bank just delivered an unexpectedly large dose of extra stimulus, growth has been holding up relatively well, but progress in getting the unemployment rate down has also slowed. Euro zone inflation is expected to be confirmed at -0.1pc, well short of its goal of just under 2pc.
If that itself weren't enough of a worry, the euro, like the yen, is stubbornly rallying just when central bank policymakers have delivered stimulus with the hope of spurring on export performance and importing inflation from abroad. This suggests to many experts that central banks are near or at the end of their policy reach.
The start of the US company earnings season is also set to kick off, with hopes abound that a reprieve from the dollar's climb may improve the outlook after one of the most volatile starts to a year ever.
The week ahead
Alcoa first quarter results
ECB long term interest rates report
JP Morgan first quarter results
Bank of America quarterly results
Eurozone inflation rates
Citigroup first quarter results