Pro-Bailout Parties Win Majority in Greek Election

Euro rallied above 1.27 at the open in Asia after New Democracy captured the Greek election. The euro is higher by more than a full cent to start the week with risk trades broadly higher as market breathes a sigh of relief. Ashraf argued back on Wednesday why he was taking a "Maintaining Risk-on" positioning in the latest Premium Insights. All 4 EURUSD & GBPUSD longs hit all targets, including 1.2690. with USDCAD longs in progress. Ashraf will update a post-Election edition of Premium Insights w/in the next 1 hr.

Late tallies show New Democracy winning nearly 30% of the vote, compared to 26% for Syriza. The next move will be to form a collation government which is likely to be made up of New Democracy and third-place Pasok, who would have 162 seats in Greek parliament a comfortable margin above the 150 needed for a majority.

Foreign leaders congratulated New Democracy leader Samaras on the result but it will be a rocky road from his first day in office. The government is behind on reform efforts and the privatization schedule laid out in the bailout agreement. A report cited an EU official saying the upcoming review of the program will be difficult.

EUR/USD sprang to 1.27 at the open and has continued higher to 1.2740. The Australian and New Zealand dollars are trading at 5-week highs.

In French parliamentary elections it was the anti-austerity Socialist party led by Francois Hollande that won. The party took an absolute majority, giving Hollande a sweeping mandate and near-complete dominance of French politics.

The market will continue to digest the Greek election results as data trickles out of the Asia-Pacific region. Early data on New Zealand consumer confidence was at a 1-year low while the May services PMI ticked higher.

At 0130 GMT, the focus shifts to May data on Chinese property prices. A significant drop could undermine the Greek optimism. Later, data on Australian vehicle sales and Japanese department stores sales will likely be cast aside.

Ashrafs Wednesday Premium Intermarket Insights called for maintaining risk on bias. Most Premium Trades have hit all targets. Stay tuned for a new edition, due to be updated shortly. Get a 1week trial here: http://ashraflaidi.com/products/sub01

-AB