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| Eurozone crisis live: Markets rally on Greece election results | Eurozone crisis live: Markets rally on Greece election results |
| (40 minutes later) | |
| 8.29am: What's the view from Rome? John Hooper reports. | |
Italy's prime minister, Mario Monti, said he was delighted by the Greek vote, "which is also a great sign for Europe". Mr Monti was speaking to journalists on his arrival in Los Cabos, Mexico, where he is due to attend the G20 meeting. | |
| The outcome was generally greeted with huge relief in Italy, which was widely seen as next in line for euro debt contagion. Last week, its borrowing costs soared and the Milan bourse slumped as doubts spread about the efficacy of the Spanish bail-out. | |
| La Repubblica was not alone this morning in reminding its readers of those concerns. "The good news is that the euro is not going to sink today in the waters of the Piraeus", wrote Maurizio Ricci. "The bad news is that nothing rules out the terminal collapse of the single currency within a few weeks or months: not necessarily in the waters of the Piraeus; it could happen instead on the spacious boulevards of Madrid or Barcelona." | |
| Mr Monti, though, was determinedly optimistic. He said the Greeks had "understood the importance of the value of the EU". During his flight to Mexico, he had taken part in a video-conference with other EU leaders. The Italian prime minister, who is known for his dry sense of humour called it a "very high-level encounter". | |
| 8.22am: The group of eurozone finance ministers said last night that the troika - officials from the IMF, ECB and European Commission - would return to Athens as soon as a new Greek government is in place to discuss next steps for the bailout adjustment programme, which is already off track. Here is the statement in full. | |
| 8.17am: Here are some analysts' views on the Greek election results. | |
| Analysts at Barclays Capital said: | |
| The results appear close to what the markets had been expecting. The fact that the centre-right New Democracy has won the most votes will be viewed as market friendly because it reduces the likelihood of a near-term Greek exit from the euro area, and will be viewed as making successful negotiations with the troika somewhat more likely. Already on Sunday night euro area officials and the IMF have expressed their willingness to look at adjusting some elements of the programme, in particular its timing. Overall, however, we expect the effect on the euro and risky currencies and assets to be muted. | |
| Michael Hewson, senior market analyst at CMC Markets UK: | |
| The challenges facing the Greek economy remain mountainous and the general feeling remains predominantly that the day of reckoning has merely been delayed. The outcome of the Greece election could prove to be one of those results that could end up being potentially toxic to the winner, given that the next government could well preside over Greece's eventual exit from the euro. | |
| Michael Derks, chief strategist at forex broker FxPro: | |
| The euro is now at $1.27 for the first time in four weeks, and from a technical perspective the price action looks encouraging.Not surprisingly, both the dollar and the yen have given back some ground whilst the pound has again underperformed. Bond yields of both Italy and Spain are lower in early trading, whilst Bund yields are higher. | |
| It remains to be seen how long the relief lasts. Greece remains on a financial precipice, with the government essentially out of money, deposits fleeing the country and tax avoidance now an epidemic. Also, there are justifiable doubts over whether Greek politicians will be able to form a properly-functioning government, one able to actually implement the troika's demands. | |
| 8.08am: On bond markets, Italian ten-year yields have fallen back below 6%, trading at 5.9% this morning. The Spanish equivalent also dropped, by 4 basis points to 6.88%. | |
| 8.02am: European stock markets follow in Asia's footsteps. The FTSE 100 index in London leapt more than 75 points in the first minute of trading and is now up about 70 points at 5551, a 1.3% gain. Spain's Ibex jumped 1.7%, Italy's FTSE MiB is up 1%, Germany's Dax 1.3% and France's CAC is 1.1% ahead. | |
| 7.52am: There is very little in terms of economic data scheduled for today, so the two-day G20 meeting in the resort of Los Cabos in Mexico will take centre stage. "European leaders are expected to come under increasing pressure to deal more decisively with the financial crisis as many nations outside Europe like China and the US are being negatively impacted ever more by the ongoing turmoil in financial markets," said Mark Huber at ETX Capital. | 7.52am: There is very little in terms of economic data scheduled for today, so the two-day G20 meeting in the resort of Los Cabos in Mexico will take centre stage. "European leaders are expected to come under increasing pressure to deal more decisively with the financial crisis as many nations outside Europe like China and the US are being negatively impacted ever more by the ongoing turmoil in financial markets," said Mark Huber at ETX Capital. |
| The first news is expected to come at lunchtime UK time when David Cameron lands in Mexico, having briefed journalists on the plane. Los Cabos is seven hours behind the UK. | The first news is expected to come at lunchtime UK time when David Cameron lands in Mexico, having briefed journalists on the plane. Los Cabos is seven hours behind the UK. |
| 7.44am: The euro hit a one-month high against the dollar this morning, rising to $1.2748, and Asian stock markets rallied. Japan's Nikkei closed up 1.8% while Hong Kong's Hang Seng and Singapore's Straits Times both added about 1%. | |
| Taisuke Tanaka, chief FX strategist at Deutsche Securities, told Reuters: | Taisuke Tanaka, chief FX strategist at Deutsche Securities, told Reuters: |
| This election result should keep hopes alive that Greece will stay in the euro. There are massive short positions on the euro. Market players now need to consider whether the euro has more downside or upside, ahead of eurozone policymakers' meetings in coming days. I think risk curencies could recover some of their lost grounds. | This election result should keep hopes alive that Greece will stay in the euro. There are massive short positions on the euro. Market players now need to consider whether the euro has more downside or upside, ahead of eurozone policymakers' meetings in coming days. I think risk curencies could recover some of their lost grounds. |
| 7.17am: Good morning. Welcome back to our rolling coverage of the eurozone debt crisis. Greece has avoided "Drachmageddon" as voters handed the conservative, pro-bailout parties a narrow victory. The New Democracy party will try to form a new coalition. So Greece remains in the euro, at least for now. | 7.17am: Good morning. Welcome back to our rolling coverage of the eurozone debt crisis. Greece has avoided "Drachmageddon" as voters handed the conservative, pro-bailout parties a narrow victory. The New Democracy party will try to form a new coalition. So Greece remains in the euro, at least for now. |
| Surprisingly, it's also still in the Euro after its win against Russia on Saturday night, and will face Germany in the European championships quarter final on Friday. | Surprisingly, it's also still in the Euro after its win against Russia on Saturday night, and will face Germany in the European championships quarter final on Friday. |
| Gary Jenkins of Swordfish Research said: | Gary Jenkins of Swordfish Research said: |
| That will be worth watching … Today and this week it will be Spanish bond yields that will probably be the most watched asset on the capital markets. You would expect them to benefit from the general relief rally that is expected to occur today (for a while at least) but then again you would have expected them to perform reasonably well on Friday and they didn't. Whilst one should not take too much notice of any one day relative trading pattern it most have been of some concern to European officials that Spanish bonds did not join in Friday's mini rally. | That will be worth watching … Today and this week it will be Spanish bond yields that will probably be the most watched asset on the capital markets. You would expect them to benefit from the general relief rally that is expected to occur today (for a while at least) but then again you would have expected them to perform reasonably well on Friday and they didn't. Whilst one should not take too much notice of any one day relative trading pattern it most have been of some concern to European officials that Spanish bonds did not join in Friday's mini rally. |