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.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS