17 Dec 2014
Greece first vote today – BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ, feels that the euro wont react much to the first Greek vote day as markets highly await the FOMC decision.
Key Quotes
“With the FOMC looming we doubt the euro will react much to the first vote today (5pm London time) in the Greek parliament on approving the presidential nominee put forward by PM Samaras. The requirement is for two-thirds of parliament to approve Stavros Dimas for president and with PM Samaras’ coalition only holding 155 of the 300 seats in parliament, getting to the 200 total will be next to impossible today.”
“A failed vote today will be followed by a second one on 23rd December before the threshold is dropped to 180 seats in a vote on 29th December. There is a possibility that come 29th December, Samaras may manage to muster the votes, if not, a general election will be held, probably on 25th January or 1st February.”
“With nobody expecting a successful vote today, the reaction will be limited. Of greater concern for the euro-zone authorities will be the collapse of the Russian economy on the doorstep of Europe. This only adds further deflationary risks and reinforces the probability of the ECB announcing a sovereign debt QE program on 22nd January.”
“Ironically, the prospect of QE in the euro-zone may be helping contain the fallout in euro-zone asset markets and in turn may be helping to keep the euro stable. But the Russian crisis only helps to widen the divergence with the US which will keep the EUR/USD under downward pressure next year.”
Key Quotes
“With the FOMC looming we doubt the euro will react much to the first vote today (5pm London time) in the Greek parliament on approving the presidential nominee put forward by PM Samaras. The requirement is for two-thirds of parliament to approve Stavros Dimas for president and with PM Samaras’ coalition only holding 155 of the 300 seats in parliament, getting to the 200 total will be next to impossible today.”
“A failed vote today will be followed by a second one on 23rd December before the threshold is dropped to 180 seats in a vote on 29th December. There is a possibility that come 29th December, Samaras may manage to muster the votes, if not, a general election will be held, probably on 25th January or 1st February.”
“With nobody expecting a successful vote today, the reaction will be limited. Of greater concern for the euro-zone authorities will be the collapse of the Russian economy on the doorstep of Europe. This only adds further deflationary risks and reinforces the probability of the ECB announcing a sovereign debt QE program on 22nd January.”
“Ironically, the prospect of QE in the euro-zone may be helping contain the fallout in euro-zone asset markets and in turn may be helping to keep the euro stable. But the Russian crisis only helps to widen the divergence with the US which will keep the EUR/USD under downward pressure next year.”