Markets hold breath before crucial Greek debt talks

Tuesday, 17 February 2015 01:05 - - {{hitsCtrl.values.hits}}

LONDON (Reuters): Global shares hit their highest since September on Monday and the euro firmed, with investors cautiously optimistic euro zone finance ministers would reach a deal to shore up Greece’s dwindling finances. The prospect that Greece and its partners will find common ground in the talks and reach an agreement that would prevent Greece having to leave the euro zone, helped push low-risk government yields higher. However, a rise in the price of safe-haven gold testified to the uncertain outcome.

The meeting of euro zone finance ministers is due to begin at 1400 GMT. The MSCI all-country world stocks index touched its highest since 22 September. Tokyo’s Nikkei closed at its highest since July 2007, buoyed by a record close on Friday in the US S&P 500 index and after data showed Japan emerged from recession in the final quarter of 2014, although 0.6% growth was less than forecast. US financial markets will be closed on Monday for the Presidents’ Day holiday. The euro rose 0.3% to $ 1.1416 and gained 0.2% to 135.37 yen. “This can quickly turn sour for the euro if there is no deal today,” said Susanne Galler, a strategist with Jefferies in London. “The market consensus is for them to do a deal by the end of this week. But we think that if there’s no deal today and the clock starts ticking then the euro will look increasingly vulnerable.” The pan-European FTSEurofirst 300 stocks index was last up 0.1% and Germany’s DAX, which hit a record high on Friday, was down 0.2%. Athens’ volatile stocks index fell 3.7%, having risen 5.6% on Friday. Greek three-year bond yields rose 146 basis points to 17.21%, way below last week’s 21.8% peak. Ahead of the euro zone finance ministers’ meeting, Greek Prime Minister Alexis Tsipras said on Sunday he expected difficult negotiations but was ‘full of confidence’. However, German Finance Minister Wolfgang Schaeuble said in a radio interview on Monday he was ‘very sceptical’ about the talks.

Oil steadies around $ 61

LONDON (Reuters): Oil steadied around $ 61 a barrel on Monday, holding gains from last week, after Kuwait’s oil minister said lower supply levels would support prices in the second half of the year. The recent rally ‘will start holding gains now and hopefully in the second half of 2015 we will see better

prices’, the minister, Ali al-Omair said. Supported by signs of lower industry spending, the price of Brent crude has increased by more than 30% in the last four weeks. In January it hit $ 45.19, the lowest in almost six years, after collapsing from $ 115 in June due to oversupply. Omair said the current oil surplus was now ‘definitely lower’ than 1.8 million barrels per day. Benchmark Brent futures traded at $ 60.89 a barrel, down 63 cents, by 0920 GMT. US crude was down 55 cents at $ 52.23. Trading volumes were reduced as US markets remained closed for a public holiday. Oil markets rose strongly last week after another drop in the US rig count, pushing Brent back above $ 60 a barrel for the first time since December. “Now we need to watch and see if $ 60 can hold as a support line,” said Olivier Jakob, oil analyst at Petromatrix in Zug, Switzerland. “I think that’s really the level to watch on Brent.”