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Portugal Might See Its Government Quit Over The Weekend

|About:CurrencyShares Euro Trust ETF (FXE)

This might constitute some kind of insight for those not in Portugal. In a few hours, Portugal's Constitutional Court will announce its decision regarding Portugal's 2013 Budget. In this decision, it's likely that the Court will find several measures as being against the Constitution.

This decision by Portugal's Constitutional Court might lead Portugal's Government to call it quits. The Court's decision will mean that the Government would have to drop several measures affecting the country's best-paid pensioners. This in turn would mean that other cost-cutting measures or tax increases would have to be found.

This development has had little media exposure outside Portugal. Tomorrow, the Government will convene after the decision is known today. So it's possible that the government could fall during the weekend, possibly prompting elections.

This, in turn, could have a negative impact on the Euro (NYSEARCA:FXE) and maybe on the equity markets as well. I must say, however, that I'm broadly positive on the Euro, and regarding the equity markets after a session like today's -- which opened with a gap down - the odds are 2/3rds favorable for a gap up on Monday.

Conclusion

In a little-known development for those outside Portugal, Portugal's Constitutional Court will announce its decision regarding the constitutionality of Portugal's 2013 Budget in a few hours' time. This might lead to Portugal's Government calling it quits over the weekend.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Stocks: FXE