Portuguese general election looks set to result in a coalition government

The next event in the euro area political cycle is this weekend's Portuguese general election. Latest polls indicate that the center-right government coalition has gained a slight lead (6pp, to 38%) over the socialist party (32%). 

"Regardless of whether this lead is reflected in the outcome, there is a high probability that a coalition government will be the ultimate result. Thus, the score of smaller parties will be key", says Barclays. 

In the case of a socialist win, radical leftists have signaled their potential support, which could mean rolling back previous reforms.