The currency markets are currently performing a substantial decrease in market volatility which many marketing experts predict will ultimately level off and come to a conclusion over the week’s end. Greece’s impending elections which were scheduled on the 17th of June are precariously adding to the general ambiguity of the market’s performance because of the current polling numbers are clearly not showing any clear results as of the moment.

The results however will result in ominous consequences of the short-term movement of the Euro which will unconsciously drag major stock indices to a lesser extent. With the indication that the Greeks will certainly be unable to build a majority government that will be unanimous in their commitment to form budgetary austerity measures will most likely result in major selling pressure into the highlight closing of the week.

Many other central banks which actions are clearly influencing the currency markets such as with the US dollar and Japanese Yen are starting to rise once more in the anticipation of potential banks in Japan to intervene in trying to weaken the country’s currency. The succeeding BoJ monetary policy meeting is scheduled on Friday in order for markets to check for any indications that the banks will be open to make its presence felt again in Forex prices. The Reserve Bank of New Zealand will similarly hold its new policy meeting but are not readily anticipating changes in the country’s base interest rate. Potential off-putting figures are seen in New Zealand but if ever there will be evident towards revisions in the bank’s growth trajectory of inflation projections then the problems will certainly besiege the country.

Madrid’s government bonds are still showing formidable glitches even with the 10 year Treasury yield still continuing to post new EU-era highs on the rise by almost 20 basis points on Tuesday. This is having similar outcome of the Treasury in Germany, France and Italy. In general this situation reveals further appalling developments relative to the Eurozone’s debt crisis and that the policy measures made are showing inadequate outcomes. The most recent decision from Fitch seems highly supportive of this prejudice as the agency demoted its credit evaluations in the 18 of the larger commercial banks in Spain.

Last Updated: June 18th, 2012