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While you were sleeping: Greek swap on track

Friday 9th March 2012

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Optimism that a debt swap by Greece required to advance to the next round in its financial rescue—pulling the nation back from the brink of default disaster—will draw enough interest underpinned stock markets on both sides of the Atlantic.

Investors holding at least 61 percent of the total 206 billion euros in debt have already signed up well before the 2000 GMT deadline, Reuters reported, adding that some Greek media have cited higher figures. That's comfortably above the 50 percent required for a deal and likely to surpass the 75 percent needed to enforce losses on any holdouts.

"The pace of responses to the bond offer is good, the percentage of bondholders tendering voluntarily is very high," a government official, who spoke on condition of anonymity, told Reuters. "It is going well, we are optimistic."

Investors agreed. In early afternoon trading in New York, the Dow Jones Industrial Average advanced 0.43 percent, the Standard & Poor's 500 Index rose 0.78 percent and the Nasdaq Composite Index climbed 0.96 percent.

Europe's Stoxx 600 Index ended the session with a 1.6 percent gain for the day, while the euro strengthened 0.9 percent to US$1.3262 and rose 1.3 percent to 108.04 yen.

The European Central Bank kept, as expected, its key interest rate steady at a record low 1 percent. President Mario Draghi signalled that the worst of the crisis might be over, even as the euro zone economy wasn't out of the woods yet.

"Available survey indicators confirm signs of a stabilisation in the euro area economy. However, the economic outlook is still subject to downside risks," Draghi said.

“The risk environment has improved enormously,” Draghi said, according to Bloomberg. “We see many signs of returning confidence in the euro.”

Across the pond, Labor Department data today showed that the number of Americans filing claims for jobless benefits climbed to 362,000 last week. That's above the 352,000 claims that was the median estimate in a Bloomberg News survey.

Investors are eyeing tomorrow's jobs report. It is expected to show that employers added 210,000 jobs to their payrolls last month, according to a Reuters survey, after creating 243,000 new positions in January. The unemployment rate is expected to have held at a three-year low of 8.3 percent.

There are signs of struggle elsewhere. Today, Brazil lowered interest rates more than expected as it desperately tries to revive the pace of recovery in Latin America's largest economy after earlier this week reporting a lacklustre 2.7 percent increase in gross domestic product last year.


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