Ireland election amid border talks, carmakers report results


Here are some of the big
stories the Financial Times will be watching in the week ahead. Ireland goes to the polls
in a presidential election as Brexit negotiations over
the Irish border rumble on. Earnings season for big
carmakers is in full swing. We’ll be watching results
from Renault, Ford, PSA, and Daimler. And the ECB meets in
Frankfurt to discuss QE. First to Ireland,
which goes to the polls in a presidential
election on Friday. It’s the first time in decades
that the incumbent head of state faces a contest for
a new term in the largely ceremonial office. Surveys suggest that
President Michael D Higgins, a veteran of the
opposition Labour party, is on course for a
comprehensive victory. Irish premier Leo Varadkar
supports Fianna Fáil’s Mr Higgins. Mr Higgins’s nearest
rival, Shaun Gallagher, is one of three
businessmen running as independents who are
panellists on the Dragon’s Den TV show. Sinn Féin’s candidate is on 11
per cent in the latest polls. But Ireland is focused
on this election just as the UK is embroiled
in Brexit negotiations, which have reached an impasse over
the Irish border question. Well, the issue of avoiding
a hard border between Ireland and the rest of
the UK after Brexit is still the major
sticking point. Theresa May hoped last week
to secure some sort of deal and move forward with the
talks, but unfortunately there’s still deadlock. So much so, that
Theresa May is actually suggesting extending
the transition period. Those are the years in which
we stay pretty much where we are in line to
the EU, until we form some sort of formal
post-Brexit agreement. But it’s not going to go down
well with Conservative MPs, and we can expect to see them
making their views very known. They’re worried that any
extension to the transition could see us paying in
more to the EU for longer than they’d like us to. And we still don’t know the
shape of the final agreement and the trading
relationship that we will have with the
EU after Brexit and after the transition. The Irish issue is
still fundamental. We don’t know how it’s
going to be resolved, and we don’t know when. Now emissions regulation
and trade disruption are expected to hit
carmakers’ profits when they report results
over the next fortnight. A new European
certification regime called WLTP has seen all brands
forced to retest all models. That’s led to a backlog at
laboratories and some vehicles not on sale during September. The result was volatile trading,
with a 23.5 per cent sales drop in Europe last month. But there was a glut in
August, as manufacturers flooded forecourts to
shift vehicles that didn’t comply with the rules. Renault, Ford, Daimler,
and the Peugeot owner, PSA, will all report
quarterly earnings this week. The slowdown in the Chinese
market in the US-China trade war is also likely
to hit profits. Ford’s already warned that
metal tariffs have cost it $1bn in higher prices. Electric ambitions also
likely to be in focus, after European Commission
rules gave carmakers until 2030 to lower CO2
emissions by 35 per cent. Shareholders will
be wanting to see which car manufacturers
have a handle on the unique set of
challenges facing them during the last quarter. In Europe, new
emissions regulations has meant that some
of the manufacturers have not been able to sell
all of their vehicles. During September, this
has led to a massive fall in brands such as VW. Another major issue
facing the carmakers, shareholders will be
wanting to see progress on, is the US and global trade. Many of the carmakers
use their US plants to export all over the world. Whether they’ll
have to change those plans after Donald Trump is
a question that’s still open. And then there’s
the issue of China. It’s the world’s largest market. And for many of
the manufacturers, it’s their biggest
source of profit. But the market has been slowing. Sales are falling after almost
three decades of growth. And the companies will
have to answer questions on how they’re going to
tackle that situation. And finally, to Frankfurt,
where the eurozone’s monetary policy makers meet
this Thursday. Discussions are set to begin
on what will follow on from the end of their mass
bond buying programme, known as quantitative easing. Policymakers were paying
close attention to goings on in Rome in recent weeks. The spread between what it
costs the Italian government and the German
government to borrow hit its highest
level in five years, as investors anticipate a
budget standoff between Brussels and Rome. But investors’ concerns are
unlikely to dissuade the ECB from its plans to
call time on QE, with the bank set to stop
expanding the 2.5tn euro programme at the
end of the year. That’s despite calls from
some Italian lawmakers for policymakers
to continue buying more of the country’s debt. Since the European Central
Bank’s last policy meeting six weeks ago, we’ve seen
global market turmoil, we’ve seen a worsening of
relations between Brussels and Rome, and we’ve
also seen further signs that exports are being dented
by the trade war between the US and China. None of that, however, is
likely to mean that the European Central Bank changes tack. It’s bad news for the
eurozone’s economy, but Mario Draghi is
still going to be intent on ending quantitative
easing by the end of this year. What policymakers are likely
to discuss in this meeting and in the December vote is
how they can do more to flesh out the strategy for 2019. And that’s what the week ahead
looks like from the Financial Times in London.

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Comments

  1. Irelands position on the border would only harden if an election was to take place. Lucky it's only the presidents elections lol Higgins is a wealth grabber.

  2. Ireland is next to leave the EU (Evil Union) hopefully soon enough EU will be dissolved like USSR back in 1991…All empires come to an end.:)))

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