19 Dec 2014
Short stable period expected in the FX Space – ING
FXStreet (Barcelona) - The ING Bank Research Team sees the somewhat stabilized FX markets and the lack of any new data in the coming week to keep the markets calm during Christmas, and comments on the Greek election outcome and the data ahead.
Key Quotes
“Greek lawmakers failed to elect Stavros Dimas as the country’s next President in the first round vote on December 17, securing only 160 votes from parliamentary deputies out of 300 when 200 votes are required. Another ballot is to be held on December 23 and he is again likely to fall short. This means it will come down to an all-important third vote on December 29 when the requirement drops to 180 votes.”
“Given the polarised nature of parliament this will not be easily achieved and if he doesn’t get enough votes then a snap parliamentary election will be called with radical Left wing Party, SYRIZA, currently leading in the polls. If SYRIZA do win it could reignite fears of a Eurozone break-up given that they are advocating a huge restructuring of Greek debts and large increases in government spending, which would be heavily resisted by other Eurozone countries.”
“Elsewhere in the Eurozone it will be a quiet week, although consumer confidence will be in focus to see whether lower fuel costs and aggressive ECB action are being felt by households. It is a similar story in the UK where GDP revisions and public finance numbers will be the highlight.”
“In the US, 3Q GDP may be revised a touch higher, but consumer confidence may be mixed. On the one hand it should be supported by rising employment and incomes, but recent equity market losses are a downside threat. Regional business surveys should be in decent shape, as should durable goods orders, while inflation pressures will be depressed by falling energy costs.”
“All in all the data should point to a very positive outlook for the US economy with the Federal Reserve leading the monetary policy tightening cycle next year.”
Key Quotes
“Greek lawmakers failed to elect Stavros Dimas as the country’s next President in the first round vote on December 17, securing only 160 votes from parliamentary deputies out of 300 when 200 votes are required. Another ballot is to be held on December 23 and he is again likely to fall short. This means it will come down to an all-important third vote on December 29 when the requirement drops to 180 votes.”
“Given the polarised nature of parliament this will not be easily achieved and if he doesn’t get enough votes then a snap parliamentary election will be called with radical Left wing Party, SYRIZA, currently leading in the polls. If SYRIZA do win it could reignite fears of a Eurozone break-up given that they are advocating a huge restructuring of Greek debts and large increases in government spending, which would be heavily resisted by other Eurozone countries.”
“Elsewhere in the Eurozone it will be a quiet week, although consumer confidence will be in focus to see whether lower fuel costs and aggressive ECB action are being felt by households. It is a similar story in the UK where GDP revisions and public finance numbers will be the highlight.”
“In the US, 3Q GDP may be revised a touch higher, but consumer confidence may be mixed. On the one hand it should be supported by rising employment and incomes, but recent equity market losses are a downside threat. Regional business surveys should be in decent shape, as should durable goods orders, while inflation pressures will be depressed by falling energy costs.”
“All in all the data should point to a very positive outlook for the US economy with the Federal Reserve leading the monetary policy tightening cycle next year.”