Greek elections and oil prices weigh further on sentiment

Greek elections and oil prices weigh further on sentiment

By Craig Erlam on Dec 31, 2014 08:13:13 GMT

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European investors are continuing to be put off by the growing risks associated with the snap Greek elections this morning, as fears that victory for the far left leaning Syriza party next month could encourage other austerity hit countries to move in the same direction.

We’ve already seen a rise in popularity in anti-austerity parties in many countries including the UK which has been suffered much less than many of the eurozone periphery. The European elections last year saw a significant rise in voting for these parties, leading to many being elected. The fear is that with so many elections in the hardest hit countries to come next year, the eurozone project could come under some serious pressure if more of these parties are elected.

The Syriza party is clearly confident of victory, as seen by its leader Alexis Tsipras’ tweet to the leader of Spain’s anti-austerity party in which he declared “We will win”. His confidence is understandable given the lead that his party has in the polls, although based on those numbers, he would not have enough support to gain a majority so there’s still plenty to play for.

US markets weren’t really impacted by the Greek news on Monday but they are edging lower this morning as lower oil prices continue to weigh on energy stocks. With so little data being released this week, we’re likely to see oil prices play a major role in equity market moves. The only notable release today is the December consumer confidence reading, which is expected to rise to 93 from 88.7, just shy of the seven year high reached in October.

The S&P is expected to open 5 points lower, the Dow 25 points lower and the Nasdaq 5 points lower.

About Craig Erlam

Craig Erlam is Market Analyst at Alpari UK. He joined Alpari (UK) at the beginning of 2012 after four years in the financial services industry, including working at Goldman Sachs. Craig writes market commentary that regularly appears on websites including The Financial Times, Reuters, BBC, The Telegraph and FOX Business. He also provides insight and analysis for clients which he posts daily on Twitter, Google+ and the Alpari (UK) website. You can also find Craig on YouTube where he gives short market updates, including charting analysis.

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