Intra-Day Market Moving News and Views
23 Jan 2015 03:46GMT
[B]EUR/USD[/B] - ..... With the major market event of ECB massive bond purchase announcement out of the way, the next focus is this Sun's Greek election.
Bloomberg reported the ECB set limits on accessing its bond-buying program that will exclude Greece for at least 6 months, raising pressure on whichever party wins Jan. 25 elections to heed the demands of official creditors.
The ECB decision locks Greece out of the QE program until policy questions raised by the vote have been resolved. Foremost among them is the strategy of Alexis Tsipras, whose Syriza party is leading PM Antonis Samaras's New Democracy in polls after he pledged to wring substantial concessions from the so-called troika of creditors.
Also reported were 2 separate surveys by the Alco and Rass polling companies published Wed in Athens showed a lead of as much as 4.9 percentage points for anti-bailout Syriza party over the premier's New Democracy party.
Greece's next gov't will have to decide on extending the international bailout program that expires at the end of Feb, with the country set to run out of cash by the end of Jun at the latest. While voters are attracted by a Syriza platform which includes opposing the terms attached to the aid, investors have been spooked by the implications of a potential Tsipras victory.
The two polls by Rass n Alco gave Syriza 31.2% n 32% respectively, compared with 27% n 27.1% for New Democracy. That suggests that even if Tsipras wins, he won't have enough lawmakers for a majority in Greece's 300-seat chamber.
Earlier the single currency nose-dived from 1.1651 to a fresh 11-year low at 1.1316 on Thursday after ECB President Mario Draghi told reporters in Frankfurt yesterday the central bank will buy 60 billion euros ($68 billion) a month of public and private debt until September 2016. Although short-covering bids above psychological level at 1.1300 provided brief support to euro, renewed selling at 1.1380 and more at 1.1400 shud cap euro's upside and yield another sell off later.
On the downside, mixture of bids and stops were located at 1.1800.
Market focus may shift to the upcoming election of Greece on Jan. 25 as ECB's president Mario Draghi said on Thursday that Greece will be ineligible for the ECB's 1.1 trillion-euro ($1.3 trillion) program until at least July because of limits on how much debt the central bank buys from a single issuer.
The European Central Bank set limits on accessing its bond-buying program that will exclude Greece for at least six months, raising pressure on whichever party wins Jan. 25 elections to heed the demands of official creditors.
According to a statement on the ECB's website, Greece must also complete a stalled review of its current bail out, as purchases from program countries will be suspended during such assessments.