Exit polls from Greece suggest the result of the second election in just six weeks is too close to call, and this could be bad news for sentiment when Asia markets open.
Pro-bailout New Democracy has a lead of just 0.5 percent over the radical leftist Syriza party which has vowed to rip up Greece’s bailout agreement with the International Monetary Fund and European Union.
"Even if it proves to be a New Democracy victory, this suggests a very strong opposition to anything they attempt in months ahead," Simon Derrick, the chief currency strategist at Bank of New York Mellon, said following the first exit poll.
"If this is the best that investors can expect, I'm guessing it could be a fairly downbeat open for markets," Derrick told CNBC.com
"The results from the exit polls are too close to call. This suggests a thriller night ahead of us," said Thanos Vamvakidis, the head of European G10 forex strategy at Bank of America Merrill Lynch in London
"Such a small difference suggests that the second party may ask for a recount, which may delay everything by a couple of days," Vamvakidis told CNBC.com.
Megan Greene, director of European economics at Roubini Global Economics, thinks a New Democracy win would be considered good news for markets.
"I would suggest investors use this opportunity to sell off, as there are no good options for outcomes in these Greek elections," Greene told CNBC.com following the first exit poll.
"If New Democracy does win, it will form a coalition with PASOK — and these two parties are by no means natural bedfellows," said Greene who thinks any coalition would be very unstable.
"If Syriza wins, there is a danger that its inexperienced, renegade leader Alexis Tsipras will engage in dangerous brinkmanship and will make a mistake, forcing Greece out of the euro zone almost by accident,” she added.
"No matter who forms the next Greek government, it is in the coalition's best interests to back down and find a compromise with the troika, as both New Democracy and Syriza want Greece to stay in the euro zone,” Greene said.
Steen Jakobsen, the chief economist at Saxo Bank, says the market had begun to price in a clear New Democracy victory meaning a tail-risk at the market open.
“I have long argued that tonight's vote is the entree for the main course in fourth quarter," Jakobsen said.
"Tonight is again a protest and not the mandate for change. Furthermore Germany’s stance on Greece and Germany’s own ratification of ESM and fiscal compact needs to be in place before the July 6 recess — that's where investors should look for direction not only the next week but potentially years," said Jakobsen, who believes in 24 hours there could very well be another hung parliament.
Pro-bailout New Democracy has a lead of just 0.5 percent over the radical leftist Syriza party which has vowed to rip up Greece’s bailout agreement with the International Monetary Fund and European Union.
"Even if it proves to be a New Democracy victory, this suggests a very strong opposition to anything they attempt in months ahead," Simon Derrick, the chief currency strategist at Bank of New York Mellon, said following the first exit poll.
"If this is the best that investors can expect, I'm guessing it could be a fairly downbeat open for markets," Derrick told CNBC.com
"The results from the exit polls are too close to call. This suggests a thriller night ahead of us," said Thanos Vamvakidis, the head of European G10 forex strategy at Bank of America Merrill Lynch in London
"Such a small difference suggests that the second party may ask for a recount, which may delay everything by a couple of days," Vamvakidis told CNBC.com.
Megan Greene, director of European economics at Roubini Global Economics, thinks a New Democracy win would be considered good news for markets.
"I would suggest investors use this opportunity to sell off, as there are no good options for outcomes in these Greek elections," Greene told CNBC.com following the first exit poll.
"If New Democracy does win, it will form a coalition with PASOK — and these two parties are by no means natural bedfellows," said Greene who thinks any coalition would be very unstable.
"If Syriza wins, there is a danger that its inexperienced, renegade leader Alexis Tsipras will engage in dangerous brinkmanship and will make a mistake, forcing Greece out of the euro zone almost by accident,” she added.
"No matter who forms the next Greek government, it is in the coalition's best interests to back down and find a compromise with the troika, as both New Democracy and Syriza want Greece to stay in the euro zone,” Greene said.
Steen Jakobsen, the chief economist at Saxo Bank, says the market had begun to price in a clear New Democracy victory meaning a tail-risk at the market open.
“I have long argued that tonight's vote is the entree for the main course in fourth quarter," Jakobsen said.
"Tonight is again a protest and not the mandate for change. Furthermore Germany’s stance on Greece and Germany’s own ratification of ESM and fiscal compact needs to be in place before the July 6 recess — that's where investors should look for direction not only the next week but potentially years," said Jakobsen, who believes in 24 hours there could very well be another hung parliament.
"All eyes will be on the (Fed Open Market Committee) and the promised liquidity help, again Greece will not provide anything but noise." .This articles form CNBC
For the latest updates on the stock market, visit,
http://daytradingstock-blog.blogspot.com/
