GREECE: Mitsotakis' ND In Pole Position, But PASOK Could Decide Next PM
Polling ahead of the 21 May election shows Prime Minister Kyriakos Mitsotakis' centre-right New Democracy on course to win a plurality of seats, but fall short of an overall majority with around 119-121 out of 300 on offer. With the main opposition leftist SYRIZA set to come in second place with between 94 and 100 seats, the centre-left PASOK (projected 33-36 seats) are likely to emerge as the kingmakers post-election.
- Based on recent polling, ND and PASOK together would likely cross the 151-seat threshold for a majority gov't. However, PASOK leader Nikos Androulakis was a target of a phone spyware scandal that implicated members of the National Intelligence Service, a department directly under the PM's control. As such, a partnership with ND may not prove workable.
- The other option could be a broad leftist coalition with SYRIZA, PASOK, and former finance minister Yanis Varoufakis' anti-austerity MeRA25, propped up from outside by the Communist Party (KKE). However, this could also prove unworkable, with PASOK much more centrist than SYRIZA, let alone MeRA25 and the KKE.
- If it is impossible to form a governing coalition, snap elections could be called. A second election would be held under a reinforced proportional system rather than the current simple proportional system. This would see the largest party awarded an additional 50 seat 'majority bonus', ensuring that it can govern alone.
Chart 1. Seat Projections for General Election Based on Opinion Polling
Source: MRB, Metron Analysis, GPO, Pulse RC, Kapa Research, Marc-Proto Thema, MNI
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US: President Biden To Deliver Remarks At Rally In Ireland
US President Joe Biden is shortly due to address a crowd at a campaign-style rally in County Mayo, Ireland to conclude his three-day tour of Ireland.
- Livestream: https://www.whitehouse.gov/live/
- Reuters reports: “The tour, a celebration of his close links to his ancestral homeland and deep Catholic faith, has provided a preview of his planned 2024 re-election campaign, with enthusiastic flag-waving crowds, photo-ops with babies and long, loquacious speeches.”
AUDUSD TECHS: Fades Into Friday Close
- RES 4: 0.6921 High Feb 20
- RES 3: 0.6861 50.0% retracement of the Feb 2 - Mar 10 bear leg
- RES 2: 0.6824 High Feb 24
- RES 1: 0.6797 High Apr 13
- PRICE: 0.6712 @ 16:03 BST Apr 14
- SUP 1: 0.6685/6620 Low Apr 14 / 10
- SUP 2: 0.6590 Low Mar 15
- SUP 3: 0.6565/47 Low Mar 10 / 61.8% of the Oct - Feb bull cycle
- SUP 4: 0.6500 Round number support
AUDUSD topped the 50-day EMA convincingly on Thursday amid broad USD weakness. This works against the broader downtrend, leaving a break below 0.6565 - the Mar 3 low - a requirement for any resumption and continuation of the bear cycle. A continuation higher would open 0.6824, the Feb 24 high and 0.6861, a Fibonacci retracement. First support to watch is Thursday’s low at 0.6685. A breach would be seen as an early reversal signal.
US STOCKS: Real Yields Outweigh Initial Bank Optimism
- The S&P E-mini has pulled back off lows of 4138 but remains under pressure at 4149 at typing (-0.6%) as it unwinds half of yesterday’s push higher.
- It comes with the 10Y real yield pushing back towards session highs seen after retail sales, currently +5bps on the day with real yields behind most of the sell-off in nominal yields.
- Nasdaq trims earlier losses to see similar declines (-0.6%) whilst in banks, the KBW index (+0.7%) still sees striking contrast between large banks after positive earnings this morning and regionals currently -2.7%.
- North of the border, the TSX outperforms with 0.0%, with banks gaining +0.5%.
