Euro Deathwatch

The current market may be the sneak preview of the eurozone's death. European share markets are all breaking down, but Greece is falling apart.

Greek bond yields jump above 8 per cent
Greece’s long-term borrowing costs breached 8 per cent on Thursday – the highest since late January – as investors fretted over the possibility that upcoming elections could derail the country’s chances of a clean exit from its bailout.

The Greek 10-year bond yield rose 85.2 basis points by late morning to 8.72 per cent. Just a week ago the yield was 6.6 per cent.

Latest GPO polls show SYRIZA ahead of New Democracy by 6.5 points
New Democracy – 20.2%
SYRIZA – 26.7%
Independent Greeks – 3%
Golden Dawn – 5.7%
KKE – 5.7%
The River – 6%
LAOS – 2.1%
Other parties – 4.7%
White/void – 2.1%
Undecided – 18.2%
Syriza is against the austerity package terms that are a part of the bailout.

In the UK, UKIP is hitting its highest poll numbers ever ahead of next year's general election. This article in the Guardian explains how many seats the party is slated to pick up if today's numbers held: How many seats will Ukip win at the general election?. Today's numbers won't hold though; UKIP is likely to be pushing 30% or higher next year. Maybe not as high as the DailyMail puts them in seats though: Record poll surge gives Ukip 25%: Survey would hand Farage astonishing 128 MPs... and puts Ed Miliband on new low.

In a electoral wave those numbers might prove conservative, but it'll take outside factors to push UKIP beyond those numbers. If the 25% figure is accurate of today's electorate, UKIP only needs to gain 2% from the Tories and 2% from Labour to make it a three way tie. By election day, it is not impossible that UKIP could win the largest percentage of votes. The UK uses the first past the post system though, which can make for a different result that national percentages would indicate.

In the markets, the German DAX has broken through 2014 support and if that's a H&S pattern, a drop to around 800 looks possible, which is about another 5% away from the 8400 level seen today. Germany has its own anti-euro party, AFD, rising rapidly.

French bond yields are going the way of Spain and Portugal.

I don't think this is the Big One, but this looks like a test run because the dollar is falling. When the Big One hits, the dollar will burn all remaining fuel and shoot for the stars.

1 comment:

  1. euro will survive, as ECB can back stop euro with gold in a true emergency