Daily Report: Risk Markets Jumped as Pro-Bailout Parties Won Greece Elections, Yen and Dollar Pressured

Risk markets opened the week higher on news that Greece would temporarily avoid a Euro exit as the pro-bailout parties won enough seats to secure a majority in the parliament after Sunday's elections. The New Democracy claimed 30.1% of votes or 80 seats, plus 50 seats bonus for victory. Socialist Pasok took 12.6% or 33 seats. Thus, the total for the pro-bailout parties is 163 seats, which was well enough to secure majority in the 300 seats parliament. Anti-austerity Syriza came in second with 71 seats. EUR/USD spiked higher to 1.2747 before treating back below 1.27 level at the time of writing. AUD/USD also dumped to 1.0134 before retreating mildly. One development to note is that the Japanese yen is the weakest one on reaction to the Greek news and was sharply lower across the board. This should reflect reduced expectation and need of immediate and coordinated stimulus from world central banks as the Greek situation stabilized for now.

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