There was a lot of Central Bank chatter (Friday saw some from the ECB which lifter the market in the afternoon), but this was based on contingency planning "if" Syriza won the Greek elections, as it turns out, New Democracy won which is a positive for the Euro-zone on the face of it. A ND win would seem to assure they'd form a coalition government with PASOK, but seemingly out of nowhere, PASOK has now made that look very unlikely. The market hates uncertainty and a Syriza win would have been very uncertain, thus all of the Central Bank chatter last week to try to immunize the market from a potential Syriza win. The assumption that a ND win would make everything ok again in Greece for the pro-bailout regime was turned on its head by PASOK. Last election it was Syriza that surprised the market, this election, the presumed ally of ND, PASOK, is the one throwing uncertainty in the mix and now a ND win no longer guarantees a pro-bailout government will be formed, bottom line, the EU got the party win it was hoping for, but the win means nothing if ND can't form a coalition government and PASOK just threw that uncertainty in to the market.
Any way, for the time being, ES is lateral-ish, but I don't like the looks of 3C. I also think the market hasn't forgotten the Sunday night ES gap up on the Spanish Bailout news and how events unfolded and wiped that out.
This isn't the confirmation you'd like to see in ES, but we still have a long night ahead of us and I believe a very volatile week. It seems the entire Greek election results must be re-thought and the market will respond to rumors and news as New Democracy tries to put together a coalition government. The other question is, "What do the Central banks do now?". As of last week a ND win would seem to imply they would be able to stand down, now that doesn't look so certain, my guess is they will wait and watch how the Greek/New Democracy efforts go, can you imagine a 3rd election if ND fails to put together a government?
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