There was virtually no market response to today’s budget, with headline economic figures strongly on course and nothing to shake up confidence, analysts have said - pointing to a “non event” in trading.
Encouragingly though, the consensus is that no news - or in this case no reaction - is good news and an indicator of emerging stability.
The most important message to the bond markets is that Ireland is on course to deliver its targeted 4.8 per cent of GDP deficit next year.
Generally there were no surprises in a budget that will prove little more than slight background noise to international markets, focused as they are on US debt ceiling negotiations.
"There hasn't been much reaction from an international perspective; there hasn't been much there to excite or disappoint," said Owen Callan at Danske Bank Markets.
“At the moment [the bond markets] want the smaller or peripheral countries, for there to be a sense that they are reducing the deficit.
“The deficit [in Ireland] is slowly starting to come down and they would want to see that headline figure next year at 4.8 per cent.
“This is key to the markets - that there is no austerity fatigue starting to kick in.”
As anticipated, Minister for Finance Michael Noonan confirmed the forecast pattern: a declining debt ratio of 120 per cent at the end of 2014, 118.4 per cent by the end of 2015 and 114.6 per cent for 2016.
Much of the mute reaction today was due to the relatively late hour at which the government laid out its stall. Details of various aspects will also have to surface before markets can properly respond.
Analysts in this regard highlight the obvious importance of precise details surrounding the county’s exit from its EU-IMF bailout and to a lesser extent the exact effects of a new banking levy on various institutions.
Conall Mac Coille, chief economist at Davy Stockbrokers, concurred there was little to cause excitement, but that this could be interpreted positively.
“The NTMA will look to get back to the markets in the first quarter of next year and I am sure they will have no difficulty doing that. There will be plenty of demand for Irish paper,” he said.
“I think the story here is that they are obviously struggling to get spending down and as a result they have increased the size of tax measures. All of the reduction from €3.1 billion to €2.5 billion has gone into reducing the base of spending cuts.”
