Markets today portrayed a contrasting picture. Asian bourses rallied while European bourses plunged on the results of the final round of Greek elections, which failed to grant Stavros Dimas the presidential seat. Greece will now have to decide within 10 days when to gather a snap election before the $292 billion bailout expires.
There is currently a flight to safety in the Eurozone. UK and German bonds are rallying as investors transfer funds out of countries such as Greece, Italy and Spain.
This new complication might add to the downward pressure the Euro currency was already facing ahead of the January meeting of the ECB.
No major economic releases are due in the US. Although thin in volume, markets might face some pressure due to the current developments in Europe.
Contending that Europe has already been “gifted a stimulus program” by the dip in oil prices, the president of the German central bank has questioned the need for the ECB’s plans on a new bond-buying program.
Greece’s failure to elect the presidential candidate will result in a fresh general election early in 2015. The increased likelihood of left-wing Syriza party coming into power and rolling back the monetary reforms introduced by the incumbent government as per the bailout deal with its international lenders, has caused Greek stocks to fall, bringing down the value of the Euro against the USD to a two-year low along with it.
US stocks continue to rise with the Santa rally but stock market futures dropped as the Eurozone outlook turned bleak with the news of Greek elections.