Greek bonds advanced for the first time in 2 weeks amid speculations that the debt-stricken country will get an international bailout. Market sentiment improved with the euro recovering and USD and JPY falling. Commodity prices also rebounded. On the other side of the Atlantic, US' retail sales data were strong enough to keep investors bullish in the near-term.
WTI crude oil price rallied to 86 in European session (intra-day high: 86.37). The contract dropped over the past 2 days as Greece's woe and oil inventory increased more than anticipated.
Yields on 2-year Greek notes slipped -18 bps after surging over +200 bps in the past 3 weeks as European Commission spokeswoman Amelia Torres said members are 'ready to act' to put in place the financial assistance for Greece. Moreover, Greece planned to announce today the amount of an April 13 auction of Treasury bills. Comments from ECB President Trichet and billionaire investors Soros increased optimism.
At an interview today, Trichet reiterated his stance that a default on Greece 'is not an issue. Regarding the use of the EU-IMF package, the President said 'at this moment in time I don't expect this mechanism to be necessary'.
Soros also said in an interview that Greece 'should not default and there is a solution...There is a need to understand that when there is a rescue effort, which Europe is now putting together, it has got to be at a concession rate of interest, not at the market rate, because the market rate reflects only uncertainties and doubts about the political will to have a rescue'.
In the US, sales at 31 chains soared +9% in March, though maybe followed by a -3% drop in the coming month, according to the International Council of Shopping Center. Easter holiday, mild weather condition and low base in 2009 were key factors boosting sales.
Gold price resumed strength as the dollar weakened. The benchmark contract surged to as high as 1159 earlier today.
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