GLOBAL MARKETS-Euro down on US fiscal concern; stocks edge up

Tue Nov 27, 2012 6:58pm GMT

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* U.S., Europe and Asia shares rise; Greek debt deal helps
    * Euro falls after hitting one-month high
    * U.S. 'fiscal cliff' burden continues to weigh

    NEW YORK, Nov 27 (Reuters) - The euro slipped on Tuesday as
concern over the threat to the world economy posed by the U.S.
"fiscal cliff" offset optimism from a deal to ease Greece's debt
burden, though stocks managed slight gains as investors showed
guarded optimism. 
    Shares globally were positive or little changed and
safe-haven German bonds fell after global lenders reached a new
deal to reduce Greece's debt and release loans needed to keep
the country afloat.
    But as Democrats and Republicans prepared to resume budget
negotiations in Washington, investors re-evaluated risk.   
President Barack Obama will launch a multipronged push this week
to garner support for his proposals on avoiding sharp tax
increases and spending cuts that will otherwise take effect at
the beginning of 2013 and could hurt economic growth.  
.
    U.S. data failed to allay concerns in currency markets. A
gauge of planned U.S. business spending increased by the most in
five months in October, but a fourth straight month of declines
in shipments underscored the damage inflicted by fears of
tighter fiscal policy next year.. 
    "Now that Greece is out of the picture for the moment, the
U.S. fiscal slope is front and center," said Christopher
Vecchio, currency analyst at DailyFX in New York.
    The euro touched $1.3009 earlier in the global day,
its highest level since Oct. 31, but lost momentum as caution
set back in. It was last down 0.3 percent at $1.2930.    
    Michael Hintze, founder and CEO of hedge fund CQS, told a
Reuters summit he expects the euro zone to continue muddling
through its troubles. But he added that "the chances of
misstepping on the way through are pretty high."           
    After 12 hours of talks, international lenders decided on
steps to cut Greece's debt to 124 percent of gross domestic
product by 2020 and promised further measures to lower it below
110 percent in 2022. 
    Following months of jockeying, the deal was broadly expected
by markets and clears the way for Greece's euro zone neighbors
and the International Monetary Fund to disburse almost 35
billion euros of aid next month.
    But with doubts about Greece's ability to hit its growth and
debt-reduction targets, few analysts expect the latest agreement
to be the final chapter in the euro zone's three-year crisis. 
    Still, stocks, at least for now, focused on the positive. 
    While the Dow Jones industrial average was down 32.47
points, or 0.25 percent, at 12,934.90, other benchmark U.S.
indexes rose. The Standard & Poor's 500 Index was down
0.56 point, or 0.04 percent, at 1,405.73. The Nasdaq Composite
Index was up 4.34 points, or 0.15 percent, at 2,981.12.
    The MSCI index of global stocks was last up
0.1 percent. European shares on the FTSEurofirst 300 index
 were up 0.3 percent and MSCI's broadest index of
Asia-Pacific shares outside Japan gained 0.6
percent to a near three-week high.        
 
    
    DEBT TALKS
    Safe-haven German government bonds fell following the Greek
deal, with benchmark Bunds yields at 1.434 percent
. Ten-year Greek yields were last at
15.824 percent. 
    The benchmark 10-year U.S. Treasury note was up
6/32, the yield at 1.6455 percent.
    "Too much (of the deal) has been anticipated, It's not a
real game-changer. We expect some upside pressure on Bund yields
but not a sustained sell-off," said Michael Leister, a senior
rate strategist at Commerzbank in London.
    "(The Greek deal) is not the green light for a sustained
rally for risk assets across the board. As we've seen before,
once the market starts scrutinizing some of the details, some
doubts may well arise," he added.  
    Uneasiness about U.S. and Greek finances was offset by the
encouraging data on the U.S. economy.
    U.S. consumer confidence rose to a four-and-a-half-year high
in November as consumers became more optimistic about the
economic outlook, according to a private sector report released
on Tuesday.  
    The Greek agreement boost copper to a three-week high
 before it gave up gains, while Brent crude 
retreated to around $110 a barrel as Greek optimism was
countered by worries over the looming U.S. fiscal situation.
U.S. crude oil futures fell 0.4 percent to $87.41.
    After an initial post-Greek deal jump, gold fell to
$1,743.11 an ounce, down 0.3 percent.
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