The euro zone cuurency, U.S. equity-index
futures droped on Monday while Treasuries advanced as Greek voters handed victory
to a leftwing party that has pledged to renegotiate the terms of an
international bailout. Asian stocks declined with crude oil and
industrial metals.
Greece’s Syriza won a more decisive victory than polls predicted, coming within two seats of an absolute majority with most votes counted. Syriza leader Alexis Tsipras has pledged to secure a writedown of the nation’s debt and end austerity measures, policies that outgoing Prime Minister Antonis Samaras warned could trigger an “accidental” exit from the euro. Germany’s Ifo Business Expectations survey is due, while fighting in Ukraine spread to the port city of Mariupol.
“There is certainly a bias to be risk averse,” said Chris Weston, chief market strategist at IG Markets Ltd. in Melbourne,
wrote in a note to clients.
“With a painful period likely for
markets as they digest and obsess over the new Greek
government’s negotiations with Eurozone officials, it’s hard to
see too much positivity toward the single currency.”
The common currency declined 0.3 percent to $1.1172 by 2 p.m. in Tokyo, and touched a more-than 11-year low. The yield on 30-year Treasuries fell to a record.
The euro sank as much as 1.4 percent to a more-than 16-month low of 130.15 yen on Friday. The Japanese yen rose 0.1 percent to 117.64 per dollar, after gaining 0.6 percent on Friday. Exports from Asia’s second-largest economy grew more than economists expected in December, as Bloomberg reports.
The joint currency’s slide is putting pressure on China’s yuan, which today rose through 7 per euro for the first time since 2001. Europe as a bloc is the biggest trading partner for the world’s second-largest economy, where exports made up 26 percent of gross domestic product at the end of 2013, according to the World Bank.
Futures on the Dow Jones Industrial Average plunged 0.6 percent and those on the Nasdaq 100 Index fell 0.5 percent. The S&P 500 lost 0.6 percent on Friday in New York, paring a weekly gain to 1.6 percent.
Copper dropped 1.9 percent in London after closing Jan. 23 at the lowest since July 2009. Nickel lost as much as 2.1 percent. The Bloomberg Commodity Index slid 0.6 percent.
West Texas Intermediate crude fell to $45.03 a barrel after settling Jan. 23 at its lowest price since March 2009. Crude stockpiles in the U.S., the world’s biggest oil consumer, rose 7.4 percent from last year to end December at 383.5 million barrels, the American Petroleum Institute said in a monthly report.
U.S. oil erased gains spurred by the death of King Abdullah of Saudi Arabia on Jan. 23 after his successor said policies won’t change in the world’s largest crude exporting nation. Brent crude was down 0.9 percent to $48.33 per barrel.
