The results of the Greek general elections seemed to have already been priced into the markets, as European equities climbed higher in the first trading session of the week. The CAC, DAX and IBEX gained between 0.35% and 1.0%, while the Athens Stock Exchange index remained under pressure and hovered around 800 points (-3.2%).
The left-wing Syriza party won the Greek elections on Sunday and formed today an anti-austerity coalition government with the right-wing party of Independent Greeks. The new Prime Minister Alexis Tsipras has promised to end austerity measures and renegotiate the terms of Greece’s €240 bln bailout from IMF and the European Union. Following the Greek election’s results, the euro came under heavy pressure initially and tested an 11-year low at 1.1098 against the US dollar but rebounded strongly above 1.1250.
On the macroeconomic front, the German Ifo business climate survey showed improving market conditions in the country as current assessment rose to 111.7 in January compared to 110.0 in December and expectations increased to 102.0, while business climate surged to 106.7 in January from 105.5 in December.
Tomorrow, investors will be keeping an eye on the release of the UK GDP data for Q4 2014 as well as US durable goods, consumer confidence and new home sales data. However, this week the main focus will turn to the US Fed’s FOMC announcement on Wednesday regarding an outlook of the US employment conditions and inflation figures. Following recent Fed comments, there are no expectations of an interest rate increase until at least March 2015.