By Tommy Stubbington
The euro slipped and Greek markets were rattled Monday amid
renewed concern over the country's future in the eurozone.
The common currency fell 0.6% against the dollar to $1.1161, its
weakest level in a week, ahead of a meeting of eurozone finance
ministers in Brussels to discuss the terms of future financial aid
for Athens. Few analysts are expecting a breakthrough.
"Uncertainty over Greece is back to the forefront," said
currency strategists at Citigroup.
Greece's Athex Composite index fell 3.3%. Bank stocks led the
decline, with Alpha Bank AE down 8.8%, and National Bank of Greece
S.A. down 7.3%.
Adding to the nerves, a senior IMF official said Sunday the fund
is working with authorities in some of Greece's neighbors on
contingency plans for a Greek default, a rare public admission that
talks could fail. Another Greek payment to the International
Monetary Fund is due Tuesday.
"The talks between the Greek government and its international
partners are entering a crucial phase, overshadowed by a precarious
fiscal situation, heavy debt redemptions, and concerns about the
stability of the banking system," analysts at UBS said.
UBS expects a deal between Athens and its creditors to be
reached, but added that failure to hammer out an agreement in the
coming weeks could put Greece on a "slippery slope" toward exit
from the euro area.
In equity markets, the Stoxx Europe 600 was 0.1% lower, as
investors weighed Greek concerns against a Chinese interest rate
cut that boosted stocks in Asia. The European index had risen
sharply on Friday, boosted by an unexpectedly clear outcome to last
week's U.K. general election and a recovery in U.S. job growth.
Germany's DAX index was 0.4% lower. France's CAC 40 fell 1.3%,
weighed down by a sharp decline in Airbus shares after a military
transport plane built by the firm crashed in Spain on Saturday.
Mining shares, which are highly sensitive to Chinese demand,
were the best-performing sector on the Stoxx 600, rising 1.9% after
the easing from the People's Bank of China.
That helped the U.K.'s resource-heavy FTSE 100 rise 0.3%.
In the U.S., stock futures indicated a 0.1% opening loss for the
S&P 500. Changes in futures aren't necessarily reflected in
market moves after the opening bell.
In bond markets, short-term Greek debt weakened, pushing
two-year yields 0.5 percentage point higher to 20.4%.
German 10-year yields climbed 0.05 percentage point to 0.59% as
markets remained jumpy following last week's selloff in eurozone
bond markets.
U.K. government bond yields were also a touch higher ahead of
the Bank of England's monthly policy announcement, with the central
bank expected to keep interest rates on hold.
In commodities markets, Brent crude oil was down 0.5% at $65.82
a barrel, while gold fell 0.3% to $1,184.80 an ounce.
Write to Tommy Stubbington at tommy.stubbington@wsj.com
Access Investor Kit for National Bank of Greece SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GRS003003019
Access Investor Kit for Alpha Bank SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GRS015013006
Access Investor Kit for Airbus Group
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=NL0000235190
Access Investor Kit for Airbus Group
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0092791005
Access Investor Kit for Alpha Bank SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US02071M1018
Access Investor Kit for Citigroup, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US1729674242
Access Investor Kit for National Bank of Greece SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US6336437057