may 15, 2012 13: 36 GMT who said that the Greece was not relevant? After becoming a little later of actors of the market for first months of the year, the May 6 elections catapulted the Greece to the stage of the world for what appears to be the last act of the saga of the Greek sovereign debt. With the Centre, pro-bailout parties, conservative party new democracy and PASOK left party, lost power in fringe, anti-bailout parties, mainly, the extreme-left Syriza, have raised concerns that the Greece could end up leaving the euro. Last week, each major party, first new democracy, then Syriza and PASOK, were given mandates to form a coalition Government. Each failed, leading to the final meeting one today.
However, all built hope that Greek leaders may find common ground was displaced. The rhetoric left and right was standoffish, at least, with the left (Syriza) calling for a moratorium on the debt and the Centre (ND and PASOK) are demanding further austerity measures to receive additional subsidies in the Euro area. Today, the worst fears were realized, when the Greek leadership, announced that no coalition Government was formed in a last-ditch effort, and that new elections could come. It is a low development of the experience of the Euro, as this probably means that the anti-bailout, primarily the Syriza parties, will gather sufficient support to form a coalition on their own. This could result in Greece by default on its debt and leaving the euro entirely - a frightening prospect but objectively possible nevertheless.
EURUSD chart of 1 minute: May 15, 2012
Graphing with Marketscope - prepared by Christopher Vecchio
Immediately after the news, the Euro has been violently in all, collapsing currency refuge, the Yen and the U.S. Dollar. In fact, against the later, we see that the EURUSD has fallen of 1.2841 for only 1.2770 in twenty minutes after the announcement. Although there was a small rebound, given the seriousness of the problems of the Euro area, it is likely that the continuous sale EURUSD should concerns hit the bond market (which they seem to be in Italian and Spanish yields note 2 years of climbing).
However, all built hope that Greek leaders may find common ground was displaced. The rhetoric left and right was standoffish, at least, with the left (Syriza) calling for a moratorium on the debt and the Centre (ND and PASOK) are demanding further austerity measures to receive additional subsidies in the Euro area. Today, the worst fears were realized, when the Greek leadership, announced that no coalition Government was formed in a last-ditch effort, and that new elections could come. It is a low development of the experience of the Euro, as this probably means that the anti-bailout, primarily the Syriza parties, will gather sufficient support to form a coalition on their own. This could result in Greece by default on its debt and leaving the euro entirely - a frightening prospect but objectively possible nevertheless.
EURUSD chart of 1 minute: May 15, 2012
Graphing with Marketscope - prepared by Christopher VecchioImmediately after the news, the Euro has been violently in all, collapsing currency refuge, the Yen and the U.S. Dollar. In fact, against the later, we see that the EURUSD has fallen of 1.2841 for only 1.2770 in twenty minutes after the announcement. Although there was a small rebound, given the seriousness of the problems of the Euro area, it is likely that the continuous sale EURUSD should concerns hit the bond market (which they seem to be in Italian and Spanish yields note 2 years of climbing).
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