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Daily Briefing: Greece and creditors reach deal in small hours
May 2, 2017 / 7:20 AM / 7 months ago

Daily Briefing: Greece and creditors reach deal in small hours

LONDON (Reuters) - Greece and its foreign creditors reached a deal early this morning on a package of reforms, a long-awaited agreement that paves the way for the disbursement of further rescue funds.

Greece's Prime Minister Alexis Tsipras leaves an EU summit in Brussels, Belgium April 29, 2017. REUTERS/Eric Vidal

The deal covers labour and energy reforms as well as pension cuts and tax rises - all of which Greece now needs to legislate before a May 22 meeting of euro zone finance ministers to approve loans which Athens needs to repay 7.5 billion euros in debt maturing in July.

While that averts the latest crisis point in the Greek saga, that same Eurogroup meeting is also due to discuss the fundamental issue of whether Greece should be relieved of more of its existing debt mountain. What is Berlin’s position on that, and is the International Monetary Fund on board?

Underlining his growing diplomatic clout, Russian President Vladimir Putin has talks with the Western world's two most important leaders today - Donald Trump by telephone and Germany's Angela Merkel face-to-face in Sochi. Merkel is visiting Russia to prepare for the G20 summit in July and to discuss conflicts in Syria and Ukraine; the White House said the focus of the Trump-Putin call would be Syria, where Moscow backs the government of Bashar al-Assad and the United States supports rebels trying to overthrow him.

After the controversy last year that surfaced when chunks of a Michelle Obama speech re-surfaced in Melania Trump's headline address to a Republican convention, Marine Le Pen seems to have gone one step further yesterday and lifted an entire section of a speech by her one-time presidential rival Francois Fillon two weeks ago.

Social media have spliced together videos of the two speeches side-by-side which show Le Pen repeating almost word-for-word Fillon’s homage to France’s historic and geographical advantages. A National Front official has rejected the charge of plagiarism, being quoted as insisting Le Pen merely was giving “a nod to a short passage in a speech about France”.


As Wall St’s ‘fear index’ of implied equity market volatility hit its lowest level in 10 years on Monday, U.S. technology shares took off - with the Nasdaq and its bellwethers of Apple, Alphabet, Microsoft and Facebook all hitting record highs. That may seem puzzling looking at the sub-forecast April economic surveys stateside, but with Apple due to report Q1 earnings later, the equity market mood is buoyant.

Based on earnings reported so far, annual profit growth at S&P500 companies was running at a whopping 13.6 percent during the first three months. And that’s all without the promised big corporate tax cuts.

Similarly in Asia, relatively downbeat Chinese business surveys for last month have done little to dampen the broader mood. Shanghai and HK shares ended a touch lower, but Tokyo’s Nikkei225 and Seoul’s Kospi closed about 0.7 percent higher. European stock futures are a touch higher too.

As most of Europe returns from the May 1 bank holiday and heads into the final week of the French election campaign, euro/dollar is steady just above $1.09. The latest opinion polls still have centrist Macron winning the runoff with anywhere between 59 and 61 percent of the vote.

Greek debt markets were unchanged after news the country and its lenders has reached a long-awaited deal on bailout reforms – paving the way for the disbursement of more rescue funds and reducing fears of another tense summer standoff.

Bond markets were eyeing comments from U.S. Treasury Secretary Mnuchin, who said the government was looking at selling ultra-long bonds beyond 30-year maturities – comments which sent the 30-year yield to a three-week high. Sterling was only a touch weaker against the dollar after weekend reports that last week’s meeting between UK Prime Minister May and the EU chiefs on starting Brexit talks went poorly. Brent crude was steady at $51.40.

Editing by Andrew Heavens

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