Syriza talk tough following landslide victory
City Index January 26, 2015 3:04 PM
<p>The Euro traded below 1.1100 in early Asian trading, as the Greek election results have increased expectation of an exit from the EU. The outcome […]</p>
The Euro traded below 1.1100 in early Asian trading, as the Greek election results have increased expectation of an exit from the EU. The outcome suggests that similar scenarios could take place across Europe and threaten the entire political stability of the EU, as some political commentators now see the anti-austerity Podemos Party of Spain gaining support.
With nearly all votes counted, opposition party Syriza are on track to win about half the seats (149 out of 300) in Parliament, just two short of an absolute majority. Forming a coalition partnership does not seem to be an issue either, as Syriza have support from a small right wing party who share similar views on the austerity measures that have been imposed after the €240 billion monetary injection Greece has received over the past five years.
After claiming victory, Syriza’s party leader Alexis Tsipras said the result would end years of “destructive austerity, fear and authoritarianism” and that his country could now leave behind the “humiliation” it has suffered. This has set the stage for fresh negotiations with the Troika, as the European heavyweights were quick to comment:
“The new Greek government will not make promises it cannot keep and the country cannot afford.” - Bundesbank President Jens Weidmann
“The result of the Greek election will increase economic uncertainty across Europe.” – British Prime Minister David Cameron
“It is absolutely clear that the ECB cannot agree to a debt relief for Greece.” – ECB’s Benoit Coeure
The Greek election result and the political fallout will take market precedence, as data releases are light on the day. The week is likely to be dominated by the Central Banks and monetary policy expectations, as the demise of inflation expectations continue to cloud policy. The FOMC on Wednesday will be the highlight, as I also expect a less hawkish tone from the RBNZ on the same day. Q4 growth data will also be scrutinized for the effects of lower oil prices in the UK and US on Tuesday and Friday respectively.
Supports 1.1090-1.1000-1.0850 | Resistance 1.1270-1.1325-1.1440
Supports 117.80-117.20-116.85 | Resistance 118.80-119.30-120.80
Supports 1.4950-1.4915-1.4830 | Resistance 1.5050-1.5080-1.5135