Markets could stumble after France, Greece votes

Rounds one and two of Greek presidential elections ended in failure. Recall that it takes a super-majority of 60% of parliament (200 votes), to elect a president.Even though this is a ceremonial position, should parliament fail to elect a president in three rounds, parliament dissolves and new national elections for prime minister and parliament take place.

REUTERS/Stefano Rellandini

Yesterday, Greek prime minister Antonis Samaras called a snap presidential election hoping to retain power even though he failed to deliver on his promise to end Greece’s €245bn troika-sponsored bailout.Today, the markets threw a fit. Yield on the Greek 10-year bond soared from 7.258% to 8.17%. This is below the spike high on October 16, but the trend is clear. Yield is up 257 basis points (2.57 percentage points) since September 10. Greece 10-Year Bond Yield

In a morning email, Saxo Bank chief economist Steen Jakobsen had a few comments on the European parliamentary elections. Here's my two cents on the EP-2014: One conclusion which stands out is growth and reform will be delayed. The trade remains LONG fixed income. Everything which just happened in Ukraine, ECB and now EP-2014 has a negative growth/inflation impact. Europe is caught out – miscommunication is the norm, and the mandate for change just moved further away despite the strong showing for anti-EU votes.

European voters have delivered “an earthquake,” says France’s prime minister, with the dramatic rise of right-wing, Euroskeptic parties. Partial returns from the 28-nation European Parliament elections show an unprecedented surge by Euroskeptics and outright anti-EU politicians. The results have sent national political party leaders scrambling with France’s ruling Socialist party holding a crisis meeting and Britain’s Conservatives rethinking their strategy for next year’s general election.

Athens (AFP) - Whatever the outcome of wrangling in Brussels over its debt problems, Greece may be heading for further political turmoil as defections by leftwingers weaken Prime Minister Alexis Tsipras' grip on government.