Yields on
peripheral bonds dipped, while European stocks and the euro held their
breath on Wednesday as fractious parties in the Greek parliament
prepared to vote on EU-prescribed austerity measures needed to unlock a
third bailout.
Lawmakers
from Prime Minister Alexis Tsipras' Syriza party and their allies
argued behind closed doors about whether to back the reforms. Tsipras
defended the deal, saying it was better than the alternative of being
forced out of the euro zone.
The parliamentary vote is seen as the key hurdle to a final agreement for the bailout, which could end -- at least temporarily -- months of increased uncertainty, volatility and frequent risk aversion in financial markets.
The pan-European FTSEurofirst 300 index fell 0.1 percent to 1,578.71, having risen for five days in a row until Wednesday. Yields on German Bunds, top-rated assets often sought in times of uncertainty, dipped 2 basis points to 0.82 percent. The euro, which has lost 1.5 percent this week, was little changed at $1.1001.
But 10-year yields on Spanish, Italian and Portuguese bonds, seen as vulnerable to spillovers from the Greek crisis, fell 2-3 basis points to 2.06 percent, 2.08 percent and 2.75 percent respectively.
"The probability does favor a passage of the necessary legislation on the austerity measures given the opposition support for Tsipras but going forward there are questions about their ability to pass legislation on reforms."
An International Monetary Fund study published on Tuesday showed that Greece needs far more debt relief than European governments have been willing to contemplate so far.
The parliamentary vote is seen as the key hurdle to a final agreement for the bailout, which could end -- at least temporarily -- months of increased uncertainty, volatility and frequent risk aversion in financial markets.
The pan-European FTSEurofirst 300 index fell 0.1 percent to 1,578.71, having risen for five days in a row until Wednesday. Yields on German Bunds, top-rated assets often sought in times of uncertainty, dipped 2 basis points to 0.82 percent. The euro, which has lost 1.5 percent this week, was little changed at $1.1001.
But 10-year yields on Spanish, Italian and Portuguese bonds, seen as vulnerable to spillovers from the Greek crisis, fell 2-3 basis points to 2.06 percent, 2.08 percent and 2.75 percent respectively.
"The probability does favor a passage of the necessary legislation on the austerity measures given the opposition support for Tsipras but going forward there are questions about their ability to pass legislation on reforms."
An International Monetary Fund study published on Tuesday showed that Greece needs far more debt relief than European governments have been willing to contemplate so far.
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