Investors enjoyed short-lived rally this morning after yesterday's elections in Greece delivered what could be a pro-bailout government that will prevent an early exit from the single currency. Gains across the board, however, were limited as investors re-focused on the on-going financial market turmoil in Spain, where bad loans linked to Spanish real estate grew by more than €1bn euros in April and raised questions about the effectiveness of the €100bn bailout negotiated last week by Prime Minister Mariano Rajoy.

Spain's bond yields rose to a record and stocks around the region reversed advances after the figures were published. Investors were also unnerved by a German government statement that suggested it was not ready to offer significant changes to the terms agreed with Greece over its €240bn in combined bailouts despite a conciliatory statement last night from the Eurogroup of Eurozone Finance Ministers.

This week's focus will remain fixed on developments in Madrid and Athens as New Democracy leader Antonis Samara attempts to form a coalition government with pro-bailout rivals and Rajoy publishes the initial results of a nationwide banking audit that will indicate how much capital its banks will require from the European Union's bailout fund.