In an election that once again calls into question the fate of euro currency, Greek voters will hit the polls this Sunday. This weekend's vote was scheduled after a May 6th election failed to give any of Greece's seven main political parties enough votes to form a functioning coalition government.
Greece's political deadlock has made that nation incapable of responding to recent austerity measures demanded by the European Central Bank. As a result, Greece's financial future, and therefore the future of the eurozone at large, hinges on the results of this weekend's election.
Over the past six weeks, the euro currency has fallen as much as 8 cents versus the U.S. dollar. It appears that the uncertainty caused by the Greek standstill has caused many global investors to sit on the sidelines until the results are released Sunday night.
Rallying slightly on polling indicating an edge for the pro-austerity New Democracy party, the June euro currency futures contract was trading at $1.265 Friday morning, up 1.5 cents (+1.2%) on the week.
Gas gets a Blast from Gov't Data
Natural gas prices rocketed higher by as much as 22% in only 27 hours, the largest percentage rally in over two years. Prices exploded Thursday after the U.S. Energy Information Administration released its weekly data showing that natural gas stockpiles were building at a slower-than-expected rate, indicating strong demand for the fuel. Analysts had been expecting the U.S. stockpile of natural gas to rise by 75 billion cubic feet (bcf), but Thursday's report showed a build of only 67 bcf, sparking a recovery in prices.
The move was exacerbated by a large number of "shorts," or traders who had previously bet on lower prices. While they had generally been profitable over the course of the last month, this week's trade erased much of their profits, forcing many to scramble for the exit. As the market moved higher Thursday, many of those traders who had sold short the natural gas market bought back their positions, accelerating the price rise. Prices continued to push higher on Friday, with July natural gas futures reaching $2.55 per million British thermal units, the highest price in over two weeks.
Despite the recent recovery, natural gas prices are still near ten-year lows, mostly due to a large supply overhang. Over the longer term, analysts warn that the market will need more demand in order to eat into the still record-high supplies.