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Greece is the word

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  • Greece is back on the political agenda (if it ever went away), and politics is back on the market and economic agenda (if it ever went away). Syriza's victory in the Greek election is not a surprise to markets, but the scale of their Parliamentary support and the comments of Syriza leaders may impact investors.
  • Markets are likely to focus on four issues: debt renegotiation with the Troika; the impact of the scale of Syriza's victory on other anti-austerity parties in Europe; the impact of Syriza policies on the Greek economy (and implications for austerity elsewhere in Europe); fears of Euro break up.
  • Japanese December exports were strong, especially exports to the US. Some of this is a price effect - Japanese exporters hold dollar prices unchanged, giving yen denominated export growth - but it is more than a weak yen. The data undermines the surprising reported weakness of US December retail sales.
  • German ifo business confidence data is due - as ever hedged with concerns about the volatility of sentiment data and the possibility of gamesmanship from survey respondents aware of the political importance of their responses. Markets look for a reasonable growth signal.