* A look at the day ahead from European Economics and Politics Editor Mark John and EMEA Markets Editor Mike Dolan. The views expressed are their own.
LONDON, May 23 (Reuters) - In Austria's knife-edge presidential election, around 750,000 postal ballots to be counted on Monday will determine whether a eurosceptic anti-immigration candidate from the far-right Freedom Party (FPO) or a leftist economics professor will be Austria's next president. Results are now due in the early evening. While the post is largely ceremonial, the race has attracted worldwide attention because a victory for FPO candidate Norbert Hofer would be the first time since Hitler that a far-right candidate has been elected head of state in a European country. Postal ballots tend to be in favour of liberal candidates so Hofer may yet be edged out by rival Alexander van der Bellen, even though van der Bellen trails based on the number of votes cast in polling stations. Early estimates show university-educated voters went 81-19 for Van der Bellen, while lower-skilled workers voted 86 to 14 -- showing a striking class-based polarisation in Austrian society. That feeds into the theory of some observers that the vote is partly a protest against the cosy grand coalitions that have mostly tended to rule Austria for decades, divvying up top jobs and privilege among a select few.
Is Greece's stand-off with creditors finally coming to an end? Greek lawmakers last night approved a new omnibus package of reforms and tax increases in exchange for much-needed bailout loans and debt relief. Athens hopes the measures, two days before a key euro zone finance ministers meeting, will help it unlock the funds it needs to pay back IMF loans, ECB bonds maturing in July and increasing state arrears. It further hopes this will kick off talks on longer term debt relief on the right foot, although for that to happen the IMF and EU lenders (read mainly Germany) have to start seeing eye to eye. In the meantime, Alexis Tsipras must bear the political cost of taxes that will hit Greeks where it hurts most, with increases in value added tax by one point to 24 percent, more tax on fuel, tobacco, internet usage and an extension of a property tax.
Britain's EU debate plumbed new depths at the weekend. David Cameron had to publicly upbraid a junior minister for wrongly insisting that Britain could not stop Turkey entering the club (the EU treaty means any existing member can veto new ones) but then went somewhat over the top by joking that Turkey would at the current rate not be joining before the year 3,000. That won't go down well in Ankara, nor particularly help EU efforts to keep Turkey on board over the migrant crisis. Meanwhile, Nigel Farage of the eurosceptic UKIP party is furious at being sidelined in the debate: he described fellow Brexiters in the official Vote Leave camp as "cretins". Today's news, however, will be official Treasury warnings of a full-blown recession if Britain leaves.
MARKETS AT 0645 GMT
Renewed Fed angst has eased a bit as the new week gets underway, with Wall St equity gains on Friday helping the mood. The overnight focus was on Japan's trade data, where big drops in exports and imports netted out with a bigger-than-forecast April surplus. That saw dollar/yen drift back below 110 and the Nikkei225 underperform the rest of Asia to end in the red. There was little from the G7 finance meeting to affect market prices and that leaves the week squarely focused on Fed nods and winks yet again. St Louis, Philadelphia and San Francisco Fed chiefs all speak later. Oil and metals are on the backfoot, but the dollar is generally softer. European flash PMIs for May will dominate the macro space first thing. It's one month today to Britain's vote on Brexit, and sterling options will be eyed. But bookmakers' odds are now squarely in favour of remain, with Betfair's pricing implying an 80 pct chance of staying in the EU.
Upcoming events/data/ themes for market reports on Monday:
- May flash manufacturing PMIs
- St Louis Fed chief Bullard speaks in Beijing
- Japan April trade
- HK April
- European corp events: Ryanair
- EZ May consumer confidence
- Israel rate decision
- Kenya rate decision
- Russian April jobless, wages, retail sales
- Turkey May consumer confidence
- Ukraine April industry output
- FDIC vice chair Hoenig speaks at OECD event in Paris
- SF Fed chief Williams speaks in NYC
- Philadelphia Fed chief Harker speaks in Philadelphia (Editing by Sonya Hepinstall)
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