Tuesday 11 December 2018

Week 10: Political strife set to overshadow ECB

Stock photo: PA
Stock photo: PA
Donal O'Donovan

Donal O'Donovan

Politics, from elections to trade wars, will overshadow the upcoming European Central Bank (ECB) policy meeting, keeping investors on the edge with markets now seen as prone to volatility after a recent equity rout.

Formation of a German government is set to end nearly half a year of post-election horse trading, but political wrangling in Italy, the Eurozone's third biggest economy, is only beginning as signs are of a potentially lengthy process to cobble together a new administration. It comes at a sensitive time, with the US administration appearing to launch a full-scale trade war last week.

That complicates life for the ECB when it meets on Thursday to discuss how to normalise policy after years of extraordinary stimulus. The bank is likely to keep policy firmly on hold, but a broader revision of its policy guidance is likely over the summer.

At home, Cairn Homes has results tomorrow, Irish Continental Group is due to report on Thursday, and Independent News & Media (INM) will report preliminary results on Friday.

Irish Independent

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