Signs of possible agreement soon between Greece and its creditors steadied world stock markets yesterday and sent US bond yields to nine-month highs by curbing demand for safe-haven US debt.
Eurozone partners offered to release billions in frozen aid in a last-minute push to win Greece’s acceptance for a cash-for-reform deal.
That helped steady global equity markets which fell in earlier trading yesterday on concerns over the failure of Greece to reach a pact with its creditors Thursday.
The creditors had laid out fresh terms to Greece on Thursday, saying Athens could have €15.5 billion in EU and IMF funding in four instalments to see it through to the end of November.
“For the most part, we are trading off any news that comes out of Greece. I am looking for an agreement that falls somewhere in between full compliance and default,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
Wall Street rose in morning trading on hopes for avoiding a Greek debt default. The Dow Jones industrial average rose 81.95 points, or 0.46 per cent, to 17,972.31, the S&P 500 gained 1.38 points, or 0.07 per cent, to 2,103.69 and the Nasdaq Composite dropped 20.17 points, or 0.39 per cent, to 5,092.02.
The pan-European FTSEurofirst 300 index was up 0.1 per cent after dropping earlier in the day.
MSCI’s all-country index, a gauge of stock performance in 46 countries, dipped 0.1 per cent, and was down for a third day.
US Treasury yields rose, with long-dated yields hitting a near nine-month high, after eurozone partners’ offer to release billions in frozen aid to Greece reduced demand for safe-haven US debt.
US 30-year Treasury yields hit 3.23 per cent, their highest since October 3.
US 30-year Treasuries were last down 1-7/32 in price to yield 3.22 per cent, from a yield of 3.16 per cent late Thursday. Benchmark 10-year notes were last down 18/32 in price to yield 2.46 per cent, from a yield of 2.39 per cent late Thursday.
Greek Prime Minister Alexis Tsipras expressed his government’s frustrations with creditors’ demands for austerity to French and German counterparts yesterday, highlighting the gulf that needs to be closed in weekend talks.
The euro fell to a session low $1.11550, a loss of 0.43 per cent, after Tsipras’s comments.
In commodities trading, Brent crude was down 61 cents at $62.59 a barrel while US crude also eased, as investors focused on Greece.