Syriza Wins

Syriza held onto power in an election that served as a referendum on the latest bailout deal. Early week trading pushed the Australian dollar slightly higher while the euro trails.

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Syriza cruised to a win in Greek elections, holding about a 5 point lead despite polls showing them neck-and-neck with New Democracy. The vote got plenty of attention but we struggle to see how it could have an impact. Policy is dictated from Germany and any Greek government has little room to negotiate.

One takeaway is that a leftist party was able to hold power. Politics in the UK, Australia and Canada have all shown signs of swinging that way while anti-establishment candidates are gaining momentum in the US. It' something we're watching but it will take years for these trends to show up in policy.

The modest euro weakness in early trading may be more a result of ratings agencies then elections. Moody's downgraded France late on Friday by one notch. Ten-year borrowing costs are just over 1% for France so the fallout will be minimal.

Elsewhere, Portugal was upgraded by S&P to BB+

In other weekend news, SF Fed President Williams said wage growth is expected to pick up and help guide inflation towards target but he didn't offer any hints on the timing of rate hikes.

The Fed's Bullard said he argued in favor of hiking rates in the FOMC. The Minutes of the meeting will reveal more. He will have a vote in 2016

CFTC Commitments of Traders

Net speculative positions as of the close on Tuesday (-/+ denotes net short/long vs USD).

EUR -84K vs -82K prior GBP -4K vs -18K prior JPY -27K vs -7K prior CAD -47K vs -49K prior AUD -41K vs -47K prior CHF +4K vs -7K prior NZD -2K vs -11K prior