Back to Greece

FX markets have fallen into what can only be described as a year-end slumber, with ranges having narrowed substantially vs. the recent norm. This remains true, although slightly less so for USDJPY which has pushed back above the 120 level in overnight trade. The other standout has been the weaker Swedish Krone, EURSEK nudging towards the 9.60 level yesterday. Finally, AUDUSD has pushed to new lows for the year overnight, down to the 0.81 level and below. The star of last week (for all the wrong reasons) the Russian rouble continues to show better prints around the 55 level on USDRUB, but liquidity is naturally very thin going into year end, so this does not mean that the Russia is out of the woods. Also offering some support has been the stabilisation of the oil price around the 60 level on Brent crude. That said, the Saudi oil minister earlier yesterday continued to rule out any cuts to production, so it remains more questionable if there is scope for a recovery from here.

For today, some interest with the second round presidential vote in Greece. The first round saw 160 of the required 180 votes for the PM’s favoured candidate. This could well go to three rounds and if the required amount of votes are not secured, then snap elections will ensue which brings the risk of a government of a far less reformist agenda. Beyond that, we have final GDP numbers in both the UK and US, which are not a major market risk event, although note that the US release is seen revised up from 3.9% to 4.3%. Durable goods data is also released in the US, which brings the risk of some dollar volatility if it falls far from consensus.