Concern over the outcome of a standoff between Greece and its
creditors continued to bear down on European stock markets
Friday.
The Stoxx Europe 600--which has gained almost 9% year to
date--edged 0.3% lower in early trade, mirroring similar moves on
country indexes across the region.
On Thursday, Germany dismissed Greece's request for bridge
funding that would give it three months to negotiate new bailout
terms, insisting that the newly elected government implement the
conditions tied to its agreed program. That comes after the
European Central Bank said Wednesday evening that it would stop
accepting Greek bonds as collateral for central bank loans, sending
Greek markets into a tailspin.
Athens main stock index plummeted more than 11% at one point
Thursday before ending the session 3.4% lower. In early trade
Friday, it edged 0.3% higher.
Greek bank stocks, including Piraeus Bank SA, National Bank of
Greece SA, Alpha Bank AE and Eurobank Ergasias SA, which dropped by
as much as 15% Thursday, recovered marginally too, though remain
sharply lower since the start of 2015.
"Compromise is a long way off and the renewed slump in the share
prices of the Greek banks seems wholly logical," said Ian Williams,
an economist and strategist at brokerage Peel Hunt.
Riccardo Barbieri, London-based chief European economist at
Japanese bank Mizuho said that the negotiations are unlikely
resolve Greece's problems any time soon. "Brinkmanship is likely to
remain a constant," he said.
In debt markets, yields on two-year, five-year and 10-year Greek
debt were trading around 16.63%, 13.24% and 9.77%, respectively. An
inverted curve, where short-dated debt yields are higher than
longer-dated paper, is generally an indication that investors see a
greater chance of default.
The euro, which dropped against the dollar Wednesday before
clawing back most of its losses on Thursday, was around 0.1% lower
on the day Friday at around $1.145.
Later on Friday, the market will be eyeing key U.S. jobs data.
The nonfarm payrolls report is expected to show the economy added
237,000 jobs in January, as the unemployment rate ticked down to
5.5% from 5.6%.
Jobless claims in the week ended Jan. 31 rose by 11,000 to
278,000, the Labor Department said Thursday. Economists polled by
The Wall Street Journal had expected 290,000 new claims.
In commodity markets, oil prices continued their roller coaster
ride, with Brent crude trading 2.7% higher in London at $58.10 per
barrel.
The price of benchmark U.S. oil futures gained $2.03, or 4.2%,
to $50.48 a barrel on the New York Mercantile Exchange Thursday--a
move that came after an 8.7% slide on Wednesday, following data
showing that U.S. crude supplies had climbed to their highest level
in about 80 years.
That decline, in turn, had erased gains from Tuesday, which
capped the biggest four-day winning streak in percentage terms
since January 2009.
Gold prices were 0.2% higher in early London trade Friday at
$1,265 per troy ounce.
Write to Josie Cox at josie.cox@wsj.com
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