EUR falls to 11-year lows below $1.11 after overwhelming victory by Syriza in Greece

Economic Data

- (JP) JAPAN DEC MERCHANDISE TRADE BALANCE: -¥661B V -¥735BE; ADJ TRADE BALANCE: -¥712B V -¥743BE

- (NZ) NEW ZEALAND DEC PERFORMANCE SERVICES INDEX: 56.5 V 54.7 PRIOR

- (NZ) NEW ZEALAND DEC CREDIT CARD SPENDING M/M: -0.6% V +0.4% PRIOR; Y/Y: 4.5% V 5.1% PRIOR

Index Snapshot (as of 03:30 GMT)

- Nikkei225 -0.7%, S&P/ASX closed, Kospi -0.1%, Shanghai Composite +0.1%, Hang Seng -0.1%, Mar S&P500 -0.6% at 2,031

Commodities/Fixed Income

- Feb gold +0.1% at $1,292, Mar crude oil -1.2% at $45.05/brl

- GLD: SPDR Gold Trust ETF daily holdings rise 1.2 tonnes to 741.7 tonnes

- (JP) BOJ offers to buy ¥400B in 5-10yr JGB and ¥20B in inflation-indexed bonds

- (KR) South Korea Finance Ministry sells 20-yr bonds at average yield of 2.470%

- USD/CNY: (CN) PBoC sets yuan mid point at 6.1384 v 6.1342 prior setting (weakest Yuan setting since Dec 4th)

Market Focal Points/FX

- Greek Syriza has been voted in as the first anti-bailout party to govern a euro member nation. While the victory has been anticipated going into the elections, the overwhelming 10pt margin (36-38% vs 26-28% for ruling ND) is telling of the austerity exhaustion in the eurozone periphery, which could subsequently shift the focus to the rise in similarly oriented Podemos party in Spain. The final count will reveal whether Syriza will secure the required 151 seats in Parliament (halfway through counting, polls suggest 149-150), however a small right-wing Independent Greeks party has already come forward as the anti-bailout partner to Syriza, and a new govt with Tsipras as the PM will likely be finalized in the next 1-2 days. Celebrating victory, Tsipras said the election marks the end of bailout agreement for Greece and cancels the program of austerity, but also pledged to cooperate with partners to achieve a "mutual solution" rather than a "destructive collision". Bundesbank's Weidmann pre-empted any re-negotiation plans, stating that "Greece will remain dependant on support and it's also clear that this aid will be provided only when it is in an aid program." EUR/USD fell about 50pips to 2003 lows below $1.11 at the open before paring some of those losses toward the afternoon session.

- Also of note in the Eurozone, speaking in Davos ECB Pres Draghi called for deeper integration in the areas of competition, bureaucracy reduction and labor market reform. ECB's Knot (Netherlands) joined Weidmann in criticizing the ECB QE announcement, stating he was not convinced of the program's "necessity and effectiveness". On the other side, Mersch (Luxembourg) said German reservations on QE were taken into account "only when you read small print", while Italy's Visco went as far as to state he would have preferred to see the ECB shoulder all the financial risks of QE rather than just 20% as was decided. Separately, Italian Econ Min Padoan announced Italy is considering setting up a "bad bank" to help clean up the troubled financial sector, given that troubled loans reached €181B as of November, more than double the 2010 levels.

- In China, the official govt mouthpiece People's Daily announced overall financial risks are controllable, adding Beijing is unlikely to ease home purchase limit in 2015 while also acknowledging risks from local debts, property-related financing, and shadow banking emerging to some extent. Report out of NDRC researcher stated the impacts of rate and RRR cuts are limited to real economy as funds likely flow into stock market, while fiscal policy measures are effective.

- Japan Dec merchandise trade deficit was smaller than expected due to strong export growth, which rose by 12.9% y/y - the highest rate since Jan 2013. Exports to Asia and US were up double-digits, rising from single digit increases in November. December 19th BOJ meeting minutes pledged the central bank would keep easing until 2% inflation stable and adjust policy as needed, while also noting progress in the change of deflation mindset. After initially opening lower, USD/JPY traded in a 50pip range above 117.30 for the balance of the session.

Equities

US markets/ADRs:

- IBM: Said to lay off more than 100K employees (26% of global workforce) as early as next week - financial press

- AXS: AXIS Capital and PartnerRe confirm to Combine in $11 Billion Merger; AXIS, PartnerRe provide Q4 guidance

- CS: Said to be considering cost cutting measures in response to recent appreciation of CHF - Swiss press

- HCA: To be added to the S&P 500 Index, after the close of trading on Monday, January 26

Notable movers by sector:

- Financials: China Minsheng Bank 600016.CN +1.1% (Anbang Insurance raises stake)

- Industrials: Kia Motors 000270.KR -4.5% (Q4 results); Hyundai Motor 005380.KR -2.1% (Q4 results); Toyota Motor Corp 7203.JP -0.1% (press speculation on FY14/15 results); JGC Corp 1963.JP +1.9% (awarded contract); CNR Corp 601299.CN +4.3% (awarded major contract)

- Technology: Samsung Electronics 005930.KR -0.1% (speculated to supply processor for iPhone 7 and Galaxy S6); Tokyo Electron 8035.JP -2.5% (terminates merger); China Electronics Corp Holdings 85.HK -5.9% (FY14 guidance)