An EU-IMF rescue package for Greece helped calm market jitters yesterday and boosted the appeal of risky assets, with world stocks hitting 18-month highs and the euro rising to its highest in nearly a month.
Greece’s borrowing costs eased to their lowest levels in a week, while other riskier assets like commodities were also in demand. Yields on “safe haven” German Bunds and US Treasuries rose.
Euro zone finance ministers approved a 30-billion-euro (US$40 billion) emergency aid mechanism for debt-plagued Greece on Sunday but said Athens had not requested it be activated yet.
Together with at least 10 billion euros expected from the IMF in the first year, it could add up to the biggest multilateral financial rescue ever attempted.
Greece’s share benchmark surged 4.9 percent, while the pan-European FTSEurofirst 300 gained 0.2 percent, helped by stronger bank shares.
Swiss bank UBS was among the top gainers in Europe, up 2.9 percent after it delivered its highest pre-tax profit since the start of the credit crisis and said withdrawals were substantially lower at all divisions.
Global equities measured by the MSCI All-Country World Index advanced 0.4 percent to 315.2 points, after hitting an 18-month high of 315.59.
Earlier, Asian shares outside Japan hit 22-month highs and Tokyo’s Nikkei average rose 0.4 percent.
“The package is big enough and the term seems reasonable. For the market it means Greece will never have to panic sell and the market can’t force Greece into a corner and that changes complexion of Greek bets and the euro in the short term at least,” said Daragh Maher, deputy head of global foreign exchange research at Calyon.
“It’s generally positive for risk because you’ve taken out one of the big banana skins in terms of macroeconomic risk. [But] Greece still face difficulties and other euro zone countries face difficulties. It’s hard to create medium-term bullish story for the euro,” Maher said.
The euro was up 0.04 percent against the dollar at US$1.3628, after hitting a high of US$1.3691. The dollar fell 0.8 percent against a basket of major currencies.
The premium investors demand to hold Greek government bonds rather than benchmark Bunds fell to 367 basis points, its lowest in a week, versus 409 basis points at Friday’s settlement close.
“It’s a question of how far Greek government debt can normalize now,” a bond trader in London said.
Athens will test market appetite for its debt with an auction of 1.2 billion euros in Treasury bills today and is still planning a dollar bond.
Yields on 10-year benchmark US Treasuries were up 4 basis points at 3.918 percent, while those on 10-year Bunds were up 6 basis points at 3.222 percent.
Oil prices rose above US$85 a barrel, buoyed by a drop in the dollar and bullish data that showed China crude imports jumping to their second-highest monthly level last month.
Offshore Chinese yuan forwards edged down against the dollar after Beijing reported its first monthly trade deficit in six years, which may decrease expectations for a rise in the yuan.
People can preregister to receive their NT$10,000 (US$325) cash distributed from the central government on Nov. 5 after President William Lai (賴清德) yesterday signed the Special Budget for Strengthening Economic, Social and National Security Resilience, the Executive Yuan told a news conference last night. The special budget, passed by the Legislative Yuan on Friday last week with a cash handout budget of NT$236 billion, was officially submitted to the Executive Yuan and the Presidential Office yesterday afternoon. People can register through the official Web site at https://10000.gov.tw to have the funds deposited into their bank accounts, withdraw the funds at automated teller
PEACE AND STABILITY: Maintaining the cross-strait ‘status quo’ has long been the government’s position, the Ministry of Foreign Affairs said Taiwan is committed to maintaining the cross-strait “status quo” and seeks no escalation of tensions, the Ministry of Foreign Affairs (MOFA) said yesterday, rebutting a Time magazine opinion piece that described President William Lai (賴清德) as a “reckless leader.” The article, titled “The US Must Beware of Taiwan’s Reckless Leader,” was written by Lyle Goldstein, director of the Asia Program at the Washington-based Defense Priorities think tank. Goldstein wrote that Taiwan is “the world’s most dangerous flashpoint” amid ongoing conflicts in the Middle East and Russia’s invasion of Ukraine. He said that the situation in the Taiwan Strait has become less stable
FRESH LOOK: A committee would gather expert and public input on the themes and visual motifs that would appear on the notes, the central bank governor said The central bank has launched a comprehensive redesign of New Taiwan dollar banknotes to enhance anti-counterfeiting measures, improve accessibility and align the bills with global sustainability standards, Governor Yang Chin-long (楊金龍) told a meeting of the legislature’s Finance Committee yesterday. The overhaul would affect all five denominations — NT$100, NT$200, NT$500, NT$1,000 and NT$2,000 notes — but not coins, Yang said. It would be the first major update to the banknotes in 24 years, as the current series, introduced in 2001, has remained in circulation amid rapid advances in printing technology and security standards. “Updating the notes is essential to safeguard the integrity
REASSURANCE: The US said Taiwan’s interests would not be harmed during the talk and that it remains steadfast in its support for the nation, the foreign minister said US President Donald Trump on Friday said he would bring up Taiwan with Chinese President Xi Jinping (習近平) during a meeting on the sidelines of the APEC Summit in South Korea this week. “I will be talking about Taiwan [with Xi],” Trump told reporters before he departed for his trip to Asia, adding that he had “a lot of respect for Taiwan.” “We have a lot to talk about with President Xi, and he has a lot to talk about with us. I think we’ll have a good meeting,” Trump said. Taiwan has long been a contentious issue between the US and China.
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