May 31, 2011
Tuesday 08.05 BST: Reports that the European Union is drafting a second bail-out package for Greece amid possible concessions from Germany revived peripheral sovereign bond markets and the euro, sending the single currency to its highest level in three weeks. The development follows a warning by the International Monetary Fund last week that it could withhold its next tranche of aid amid opposition to further privatisations and asset sales in Greece.
The euro briefly topped $1.44 to the dollar before setlling at $1.4385, climbing above its 55-day moving average of $1.4334. Meanwhile, yields on 10 year Greek sovereign debt fell 16 basis points to 15.73 per cent as 10-year German bund yields climbed back above 3 per cent, up 3bp at 3.01 per cent.