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Daily Briefing: 70/70 - Putin's lucky number

LONDON (Reuters) - From Berlin to Rome and London to Bratislava and Vienna, Europe’s polarised electorates have pushed their governments into loveless coalition pacts, hand-to-mouth existences with tenterhook majorities or marriages of convenience with unpalatable partners.

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Contrast that to prospects for Vladimir Putin, who will secure a new term in Russia's election on Sunday and whose only real concern is making sure a convincing number of voters turn out. His advisers have a goal of 70/70 - 70 percent turnout with 70 percent of votes for Putin - a threshold they believe will keep potential challengers at bay and shore up his position as Russia's only viable leader for another six years.

The untarnished reality is less impressive: his main opponent, Alexei Navalny, has been barred from running; Putin has had the advantage of deploying the state machinery for his campaign; and it is still not clear what he actually wants to do with a new term in office once he has won. Yet even as Western leaders seek to toughen their stance on Russia, it is equally clear that, after nearly a quarter of a century of Putin rule, they still don't know how best to deal with him.

German Chancellor Angela Merkel heads to Paris on Friday for talks with French President Emmanuel Macron aimed at cranking up the Franco-German motor that has traditionally powered European integration. Merkel will nonetheless throw some cold water over Macron's more ambitious plans to reform the eurozone, notably anything which smacks of German taxpayers paying to mitigate risk elsewhere in the single currency zone - anathema to her conservatives.

That said, both know that with eurosceptic, far-right parties breathing down their necks at home, they have not got long to agree on something that can make the EU look more appealing than it does to many voters right now.


Global markets are down for the fourth straight day and headed for a weekly loss. The dollar has snapped its three-week run of gains and returned to the red for the week; it’s down more than 0.6 percent against the yen today. The U.S. yield curve - the gap between the 2- and 10-year bond yields - is at the flattest in six weeks. So, think risk-off and growth fears.

Concerns include a global trade war that could hit world growth and company profits, then U.S. politics, with reports that special counsel Mueller has issued a subpoena for documents related to President Donald Trump’s business, just days after the departure of Gary Cohn and Rex Tillerson and the appointment of China hawk Peter Navarro.

Chinese stocks are set for a more than 1 percent loss on the week and European shares look set to end the week with a loss too. Finally, European growth also seems to have plateaued, data have been indicating. All that means the safe-haven bid remains alive and well - Treasury yields are just off the two-week low of 2.80 percent while German yields touched the lowest since Jan 21 on Thursday.

The excitement in Europe this morning was the delayed opening of the Eurex exchange, due to "technical glitches" meaning that German and the Euro stocks futures have failed to open. But after the delay, German bond futures have opened a touch higher, and stock markets are also up.

A number of stocks are expected to see some big moves today. It’s going to be the first day of trading for Siemens’ Healthineers, which one trading desk sees rising 16 percent. While it’s fairly quiet on the results front it looks like traders are split on Altice’s full-year figures, predicting a move in the range of -5 to +5 percent with some citing disappointing guidance, though others are positive on signs of a turnaround at the debt-ridden telco group.

Elsewhere the M&A machine grinds on with Britain’s NEX Group saying that it has received a preliminary takeover approach from U.S.-based exchange operator CME Group, a move which aims to create a cross-border trading powerhouse. NEX’s shares are seen jumping as much as 25 percent.

In emerging markets, shares slip 0.2 percent. The Russian rouble hovered near a one-month low, and was down around 1.5 percent for the week. Russian stocks fell 0.2 percent and were down 1.8 percent for the week. Checking Russian bonds and CDS. Russia has opened books for a new sovereign Eurobond issue this week which should be a test for what appetite investors still have for a sovereign which looks like its on its way to becoming a pariah.

Other currencies were mainly weaker, with the rand set to end the week down around 0.7 percent, while the Turkish lira was hovering near 3-1/2 month lows hit on Thursday and is down 2.2 percent against the dollar for the week. The lira also plumbed a record low against the euro on Thursday, and is down 2.3 percent for the week. Turkey has been hit by worries over the economy and its involvement in the Syrian conflict.

-- A look at the day ahead from European Economics and Politics Editor Mark John and Deputy Markets Editor for Europe, Middle East and Africa, Sujata Rao-Coverley. The views expressed are their own. --