| CATEGORY: FX |
Mon 28 May 2012
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LONDON (SHARECAST) - The European session is under way with the main equity benchmark indices opening with average gains of 0.8% as five Greek election polls released over the weekend showed the New Democracy party taking the lead over Alexis Tsipras' left-wing Syriza by between 0.5 and 5.7 points.
Markets will feel more comfortable with a New Democracy victory because Syriza will surely look to renegotiate the austerity conditions imposed by the “troika”.
In foreign exchange markets, the euro opened with bullish trading gaps against the majors, a good sign for risk assets, but that now appears to be turning around.
The euro/dollar is moving away from 1.2600 again and the euro/yen has dipped below 100.
The euro/Swiss franc is almost unchanged around 1.2030. Following last week’s intervention rumors, the Swiss franc will see some upside pressure but will likely remain anchored near 1.2000.
Euro/Sterling is trading near 0.8030.
The US dollar is down against the pound, yen, and other currencies.
Carry trade currencies are rising, led by the aussie and the kiwi. The Canadian loonie is more highly correlated with the US dollar.
Spain’s risk premium has moved above 500 basis points this morning while at the other end of the scale the German bund remains strong with a yield of 1.39%.
Today is expected to be a low volume day because of the Memorial Day holiday in the United States.
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