It is still early days, but the fallout from the Greek election has not really impacted on global markets ... yet . The radical left party, Syriza, winning the Greek elections could potentially bring about the breakaway of Greece from the Eurozone.
A rather belligerent early stance from the nascent Prime Minister Alexis Tsipras could merely be put down to post - election victory exuberance, but it is likely that he will need to adopt something of a more conciliatory tone to when he has to try and renegotiate terms of Greece’s € 240 bn bailout. Greek stocks that have taken a massive hit with the Athens General down 14% last week since the result . Also the Greek 10 year bond yield has risen over 30 % to 11.5%.
However, back in the dark days of 2012 when a “Grexit ” was first on the cards, the Greek 10 year yield rose to over 40%, so there s still some way to go on that front. For now the market outside Greece appears to be fairly sanguine (maybe it is something to do with the promise of € 60 bn of asset purchases from the ECB). Peripheral Eurozone yields are only slightly higher, such as Portugal at 2.4%, whilst the Italian 10 year continues to trade below the 10 year Treasury.
Perhaps the real fun will come when the negotiations over the debt begin, but for now markets seem to be fairly relaxed.
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