Asia Stocks Rally, EU Leaders Talk Greek Compromise

The moves were mild amid news Euro zone leaders had met through the night to discuss a compromise proposal on a third bailout for Greece.

Published: 13th July 2015 11:53 AM  |   Last Updated: 13th July 2015 11:53 AM   |  A+A-

SYDNEY: The euro steadied on Monday after an early slip while Asian shares swung higher as European leaders pressed on with talks for a Greek deal and Chinese trade data beat forecasts in a promising sign for global demand.

The moves were mild amid news Euro zone leaders had met through the night to discuss a compromise proposal on a third bailout for Greece.

Euro zone leaders had told the cash-strapped Greek government it must enact key reforms this week to restore trust before they would talk of financial rescue.

After an initial slide to $1.1090, the single currency quickly steadied to $1.1135. Likewise, the euro pared its losses against the yen to stand at 136.58 after a drop to 135.40. The U.S. dollar barely budged against a basket of currencies at 95.950.

Aiding the euro were rumours the European Central Bank had agreed to delay a Greek repayment of 3.5 billion euros that had been due on July 20.

Asian stock markets kept their nerve with Japan's Nikkei gaining 1.6 percent. MSCI's index of Asia-Pacific shares outside Japan bounced 0.8 percent. Opening gains were also tipped for European bourses.

Helping the mood was data from China showing exports rose 2.8 percent in June, while imports slipped 6.1 percent. Both handily topped expectations in a tentative sign global demand might be on the mend.

The Asian giant reports domestic product data on Wednesday and forecasts are that annual growth slowed to 6.9 percent last quarter, making it harder to meet Beijing's target of 7 percent for the whole year.

Responding to a raft of support measures from Beijing the CSI300 index of the largest listed companies in Shanghai and Shenzhen added 3 percent on top of last week's rally of 5.7 percent.

"This is victory in the first battles of a long-lasting war," said Hou Yingmin, analyst at brokerage Aj Securities.

"But it takes time for market sentiment to fully recover from the recent trauma, which was so severe, and bears are likely to make a comeback anytime soon."

U.S. government debt was also in demand as 10-year Treasury futures advanced 9 ticks helped in part by wagers that all the global uncertainty would delay a rate hike there.

Federal Reserve Chair Janet Yellen appears before the House Financial Services Committee on Wednesday and is likely to repeat that any rise in rates is very data-dependent.

In commodity markets, gold failed to get much of a safety bid, easing over a dollar to $1,160.80 an ounce.

Oil prices were under pressure as Iran and six world powers neared an historic nuclear deal that would bring sanctions relief and thus more crude onto the market.

Brent crude sank $1.24 to $57.49 a barrel and U.S. crude shed 91 cents to $51.83.

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