Greek election still dominates the news

•     Greek election still dominates the news

–    Coalition with right-wing Independent Greeks reassures the market

–    But SYRIZA has already prepared legislation to reverse some of the country’s structural reforms = EUR-negative

•     Main issues are govt budget and structural reform

–    Debt relief isn’t that big a problem, as maturities are quite long

–    Govt is currently running a big deficit; can they raise taxes enough?

–    They intend to reverse many structural reforms

–    ECB may pull the plug on Greek banks at end-Feb if they don’t reach an accord

•     CHF weakens as less need for safe haven after Greek election

•     RUB collapses on S&P downgrade to junk, talk of more sanctions

•     Today:

–    UK:  1^st estimate of Q4 GDP expected to show acceleration in growth, but we fear the consensus could be disappointed

–    US: Durable goods orders for December expected to rebound; S&P/Case-Shiller house price index, Richmond Fed manufacturing index, Conference Board consumer index, preliminary Markit service-sector PMI

•     FOMC preview

–    FOMC likely to prioritize domestic economy over international economy, focus on labor market improvements. No significant change in text likely