Greek worries return to hit euro, world shares flat
Wednesday, 7 April 2010
Frankfurt, Apr 6 (Reuters): The euro fell against both the dollar and yen Tuesday on renewed worries about Greek debt while world shares were flat with Europe higher.
Jitters about Greece returned to the market after a newspaper report said it was seeking $5 billion to $10 billion from US investors to help cover its May borrowing requirement.
The process of seeking the funding looks likely to be akin to an emerging market, including a roadshow.
Greece was also reported separately to be seeking to amend the deal struck late last month with European Union partners to provide an emergency safety net.
One result was a sell-off in the euro, which was down half a percent against the dollar at $1.3417 and around 1 per cent against the yen at 125.94 yen.
"There's speculation that the financial situation in Greece will become increasingly difficult," said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt. "Negative news about Greece will continue to pressure the euro."
Euro zone government debt also fell. The June Bund future was down 64 ticks on the day at 122.80.
The interest rate-sensitive two-year Schatz yield was up 5.5 basis points at 1.03 per cent. The 10-year Bund yield was up eight basis points at 3.163 per cent.
Five-year Greek credit default swaps -- the cost of insuring Greek debt -- rose to 354 basis points from 347 basis post Friday, the last day they were priced.
Euro zone bonds were also catching up from the long Easter weekend, which saw some positive US economic data, including on jobs.
Word stocks as measured by MSCI were flat to higher, with European stocks holding up the benchmark.
Jitters about Greece returned to the market after a newspaper report said it was seeking $5 billion to $10 billion from US investors to help cover its May borrowing requirement.
The process of seeking the funding looks likely to be akin to an emerging market, including a roadshow.
Greece was also reported separately to be seeking to amend the deal struck late last month with European Union partners to provide an emergency safety net.
One result was a sell-off in the euro, which was down half a percent against the dollar at $1.3417 and around 1 per cent against the yen at 125.94 yen.
"There's speculation that the financial situation in Greece will become increasingly difficult," said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt. "Negative news about Greece will continue to pressure the euro."
Euro zone government debt also fell. The June Bund future was down 64 ticks on the day at 122.80.
The interest rate-sensitive two-year Schatz yield was up 5.5 basis points at 1.03 per cent. The 10-year Bund yield was up eight basis points at 3.163 per cent.
Five-year Greek credit default swaps -- the cost of insuring Greek debt -- rose to 354 basis points from 347 basis post Friday, the last day they were priced.
Euro zone bonds were also catching up from the long Easter weekend, which saw some positive US economic data, including on jobs.
Word stocks as measured by MSCI were flat to higher, with European stocks holding up the benchmark.