Greek voice can markets ease, give, even if only temporarily

4:00 AM Greek, markets, temporarily, voice No Comments

By Caroline Valetkevitch, Reuters
4: 27 Pm EDT updated: NEW YORK--the elections on Sunday per bailout showed early results from Greece parties are on course to win a narrow majority, which can markets some respite, but Coalition majority looks set be narrow and may be missing necessary stability to enact painful reforms.

Regardless of the result, Europe's problems are long time not yet been completed, as the debt crisis that threatens to devour the larger economies of Spain and Italy.

All characters of the tensions in markets on Monday morning and investors will look for action by central banks of the world which are prepared according to officials to intervene if trade is turbulent.

Enters Greece the choice as investors see it, the future of the country in the euro area and possibly the future of the currency block itself may be.

Keep the Greek conservative new democracy party and Socialist PASOK, and large back a EU/IMF rescue package, Greece before the bankruptcy, looked set to secure a narrow majority in Parliament together. SYRIZA, the leading left-wing party committed to tear the terms and conditions for the bailout, conceded defeat.

"they will probably try form coalitions and the real question is, with the horse trading it is how stable?", said Doug Roberts, chief investment strategist at channel capital Research.com in Shrewsbury, New Jersey. "But now it's more like enter the can of down the road." "Either way you are not talking about a stable situation."

An official vote projection showed new democracy under 29.5 percent of the vote, with SYRIZA in second place with 27.1% and PASOK with 12.3 percent of third parties.

For 50 places bonus given to the party which comes first, the result means 300 seats 128 for 33 seats in the Parliament for PASOK and new democracy.

Roberts said whether central banks intervene depends on the markets next week. "If the markets start to the South I think he is forced," he said.

Euro hit of one of the few markets trade shortly after the official election projections in Greece a three-week high against the dollar in the early Australasian trade rose to around $1.2730 according to Reuters information from approximately $1.2655 late in New York on Friday.

But markets had tended to positive policy developments late Sunday and early Monday only to quickly undo to respond. So was it last weekend, after the EU a 100 billion euro bailout for Spanish banks announced.

Weeks of concern about the possible outcome of the Greek election have prompted a number of central banks to prepare the market problems.

Officials from the Group of 20 central banks in major economies are willing to take in order to reassure the markets, the outcome of the Greek elections should create a market storm, told of Reuters.

Among them President said European Central Bank Mario Draghi was the ECB to fund ready and viable euro zone bank that gets into trouble. The Bank of England on Thursday announced a $155 billion (?100 billion) offer of the loans to banks.

Group of 20 leading kick-off a two-day summit in Mexico on Monday and the rest of which is likely to week to not be quiet.

The Federal Reserve is a policy statement by release on Wednesday at the end of their two-day meeting and the steady stream of debt warnings and downgrades is likely to continue.

Another sign of investor nervousness was the CBOE volatility index <.VIX>, Wall Street fear gauge, for much of Friday as stocks rose, although the VIX closed lower. An inverse relationship usually have stocks and the VIX.


Many investors have tried, prepare for the worst.

"People attacking their positions in the last two weeks on the road in this weekend, secure were have", said Alec Levine, a derivatives strategist at NEWEDGE Group SA in New York.

"No matter what happens (this) week, we return to a massive game of chicken between the newly elected Greek Government, who can be, and the EU, specifically Germany."

THE FED PROVIDED

Despite the fears, shares ended the week on a positive note, marking a second week of gains. The benchmark standard & Poors is now 6.8 percent for 2012, but still good for the highest of the year index <.SPX>.


Part of what has optimism investors has spurred in recent weeks was the hope that would be the fed and other central banks, more economic stimulus. There is still speculation about, whether the Fed will engage in a third round of quantitative easing.

"We believe that QE3 expectations in the market drive one way or other," said Omar Aguilar, chief investment officer for equities at Charles Schwab Corp., in San Francisco.

But the fact that the Fed has changed no current policy could mean the economic data decision makers see is "not as bad as everyone thinks," said Aguilar.

Before the vote Russell indexes also said that certain events in Greece could mean changes in their indexes their rule "financial crisis" through implementation. Their indexes of Russell include global index.

ON RATINGS WATCH

Add to investor nervousness was a whole series of the last ratings cuts.

Under the recent Fitch Ratings on Friday downgraded Egypt's sovereign credit rating deeper into junk status. On Thursday, Egan-Jones cut sovereign creditworthiness of France.

Many investors see this trend continue as agencies try to measure the impact of the euro and other issues on the global economy.

"We are likely to see more of them", said Peterson.

Below the CNBC Sue Herrera forecasts, what next week are likely top business and financial stories.

Copyright 2011 Thomson Reuters.