Tags: greece | eu | debt | stocks | bonds | yen

Stocks Climb, Treasuries Fall as Optimism Rebounds in Greek Talks

Monday, 22 Jun 2015 06:43 AM

Stocks rose around the world and Treasuries fell with German bunds on speculation European officials will break a monthslong impasse in talks over a Greek bailout. The Banks’ credit risk had their biggest decline in almost two years and the yen weakened.

The MSCI All-Country World Index climbed 0.7 percent at 6:09 a.m. in New York, with the Stoxx Europe 600 Index up 1.9 percent. Standard & Poor’s 500 Index futures added 0.8 percent. Yields on 10-year Treasury notes jumped seven basis points to 2.33 and Germany’s increased to 0.85 percent, while rates on Greek bonds tumbled 147 basis points to 11.20 percent. The cost of insuring European bank debt with credit default swaps fell the most since July 2013. Japan’s currency slid against all but one of its 16 major counterparts.

Prime Minister Alexis Tsipras’s new offer goes "in the right direction" and can "be a basis for an accord," European Economic Affairs Commissioner Pierre Moscovici said.

JPMorgan Chase & Co. said Greece being ejected from the euro probably won’t rock world markets. A U.S. report may show sales of existing homes rebounded last month, according to a Bloomberg survey.

"The risk on mood is driving markets today, not only in bonds but also in equities," said Patrick Jacq, a senior fixed- income strategist at BNP Paribas SA in Paris. "Clearly the market is playing a positive outcome. But this doesn’t mean we’re going to see an agreement. As long as we don’t have an official agreement between Greece and its creditors the situation remains vulnerable."

Emergency Funds

The European Central Bank also approved emergency funding for Greek lenders for the third time in less than a week, according to a person familiar with the matter.

Banks led Greece’s ASE Index up 7.4 percent for the biggest gain among western European markets. Germany’s DAX Index rose 3.2 percent, and France’s CAC 40 Index increased 3.1 percent.

More than 15 shares advanced for every one that declined in the Stoxx 600 climbed for a third day, with trading volumes 45 percent above the 30-day average, according to data compiled by Bloomberg.

Tsipras flies into Brussels with a plan for a "mutually beneficial agreement, which will give a definitive solution and not defer the problem," the government said in a statement.

Bouygues Rallies

Bouygues SA jumped 15 percent and Altice SA rallied 18 percent after Patrick Drahi’s company said its cable and wireless unit has made an offer to buy France’s third-largest mobile-phone company from Bouygues.

Smaller carrier Iliad SA rose 11 percent as saying it’s in exclusive talks with Altice’s Numericable-SFR to acquire assets. Orange SA gained 7.1 percent.

Sky Plc added 4.5 percent after a report that the Murdoch family rejected two takeover bids for its stake in the U.K. company. Severn Trent Plc gained 2.8 percent after the Sunday Times said that Borealis is considering an offer for the U.K. water utility.

Kuoni Reisen Holding AG climbed 2.3 percent after the Swiss travel services company agreed to sell its entire European tour operating business to Rewe Group’s DER Touristik.

S&P 500 E-mini futures expiring in September increased after the index posted a weekly gain. The number of existing home sales in the U.S. increased 4.8 percent in May after falling 3.3 percent the previous months, according to the median of 60 estimates by economists in a Bloomberg survey.

Emerging Markets

The MSCI Emerging Markets Index added 1.2 percent, the most in two months, as equity gauges in Hong Kong, India, the Czech Republic and Poland gained at least 1.5 percent.

The Hang Seng China Enterprises Index rebounded from the steepest weekly drop since May 2012. Mainland markets were shut Monday for a holiday. The Shanghai Composite Index tumbled 13 percent last week to enter a correction.

Russia’s ruble and South Korea’s won climbed at least 0.7 percent versus the dollar Monday, leading gains in emerging market currencies.

Treasuries dropped with higher-rated government bonds around the world as investors moved out of haven assets and into higher-yielding assets.

Italian bonds climbed for a fifth day, with the 10-year yield falling 13 basis points to 2.15 percent. The additional yield investors demand to hold the securities instead of benchmark German bunds narrowed 19 basis points, the biggest drop since June 2013.

Spain’s 10-year bond yield fell 12 basis points, to 2.15 percent.

Yen Slides

The yen fell for the first time in three days, weakening 0.3 percent to 123.08 per dollar. The euro added 0.4 percent versus the yen and the Swiss franc.

The Markit iTraxx Europe Senior Financial Index declining nine basis points to 81 basis points. The Markit iTraxx Europe Index, which tracks credit-default swaps for investment-grade companies, declined the most since October.

West Texas Intermediate crude climbed 0.9 percent to $60.17 a barrel in New York. Brent gained 0.7 percent to $63.43. U.S. natural gas fell 2.4 percent to $2.749 per million British thermal units.

Gold dropped 0.4 percent to $1,195.01 an ounce. Palladium dropped 0.7 percent to a four-month low.

Copper was little changed at $5,669.50 a metric ton, near the lowest closing price in four months before data Tuesday projected to signal continued weakness in manufacturing in China, the world’s biggest metals consumer.

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Stocks rose around the world and Treasuries fell with German bunds on speculation European officials will break a monthslong impasse in talks over a Greek bailout.
greece, eu, debt, stocks, bonds, yen
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2015-43-22
Monday, 22 Jun 2015 06:43 AM
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