Greek Parliament Says Yes
At a midnight vote, the Greek parliament approved the latest round of austerity measures by a majority of 153 to 128. Dissenters emerged from within the ranks of government however, and consequently six deputies were expelled from PASOK and another one from Prime Minister Samaras’ ND party. The government still commands a majority but now all three coalition parties are needed to make up the numbers – the third coalition party (Democratic Left) had been originally included just to beef up the government’s majority, but from now their full support will be needed to ensure the government’s survival. A second vote on the wider issue of next year’s budget is scheduled for midnight Sunday, but given the austerity measures (approved just moments ago) are the most contentious component of next year’s budget, it seems likely Sunday’s vote will also be approved – again with a slender majority. Elsewhere, NZDUSD dropped 80 pips after New Zealand’s Q3 unemployment rate wildly missed consensus forecasts. Instead of dropping to 6.7% as the market had expected, the rate rose to 7.3%. We would have to look back over two years to find a miss of this magnitude. The participation rate didn’t budge either, so the poor outcome cannot be explained away by assuming an increase in the number of people looking for work. Meanwhile investors continue to digest the outcome of the US election. USDJPY has traded back below 80.00 after the overnight UST rally, but the pair still looks relatively well supported at these levels. Risk appetite weakened more broadly too causing the S&P500 to drop 2.4%. AUDUSD fell in sympathy throughout the US session, but has managed to find a foothold just above 1.04. Ahead today, Bank of England and ECB policy decisions are due, but our economists expect no change to policy settings.
Click here to read the full report: UBS Morning Adviser Asia
UBS Investment Bank