18 June 2012: New Democracy wins in Greece, Markets generally positive

Markets– Stocks rally fades, Spanish bond yields beyond 7%: Post the Greek election, investors have turned their attention towards the rising Spanish bond yields which has seen risk assets falter.
•    Stocks: FTSE All World gained 0.4%, as FTSE Eurofirst is up 0.1%; In Asia mood is bullish as FTSE Asia Pacific added 1.3% and Tokyo’s Nikkei gained 1.77%; S&P 500 looks set to lose 0.2% on open; FTSE 100 has gained 0.48% to 5504
•    Currencies: Euro is unchanged from Friday at $1.2638 against Dollar; Sterling against dollar is down 0.3% to $1.5677
•    Debt: The German Bunds are almost flat at 1.44% while US 10-years have gained 3bp to trade at 1.63%; Spain’s yields have added 25bp and are at 7.13% mark, a record high for the euro era
•    Commodities: Brent Crude gained 0.2% to $97.81/barrel; Copper is up 0.4% today to sit at $3.40/pound; Gold is off $5 at $1623/ounce

Global Economy
•    New Democracy party wins in Greece: The centre-right party has scraped a victory in Greek elections. The markets have responded generally well to this news. The opposing left-wing party was against bailouts and austerity measures, so this result brings some relief to the EU. However, there will be changes in Greece’s bailout conditions, as the EU will reduce interest rates and allow Greece longer payback periods.

Companies

•    Axa raises $7bn for buyout deals: Axa has raised a $7bn Private Equity fund for to scoop up interests being sold at discount rates. Axa is looking for ‘secondaries’ deals where they would target stakes in buyout funds such as KKR and Permira.

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