020 7898 0500Political developments in Greece look set to undermine the euro and the Eurozone as the Greek Prime Minister Antonis Samaras said on live TV in Athens that it is likely that parliamentary elections will be held on January 25, a year and a half before his coalition’s term was due to end. The likelihood of the Greeks electing an anti-austerity party seem high which will put the country into direct conflict with the European Central Bank (ECB) and the International Monetary Fund. Uncertainty should be bad for the euro but the markets may take a different view as the Greek position needs clarity and a final solution rather than the current situation which is viewed as being untenable.
Today sees some data releases from Spain and Italy – from Spain we await the Consumer Price Index, expected at -0.7%, and from Italy the Business Confidence Index. Difficult to see these data releases having any major influence on the euro as expectations are already set low, although such a high level of deflation in Spain must be a worry and increase the likelihood of the ECB undertaking some form of quantitative easing sometime soon.
Please call your trader to get the latest update on the euro and see what effect worries over Greece is having.
