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Greek restructuring looks likely to go ahead

Yesterday’s consolidation halting a few day of equity market declines paved the way for stronger gains today as confidence was boosted following suggestions that enough bondholders will sign up to the Greek debt deal that is to expire at 8.00 this evening. The response to the offer has apparently been good, and news just before the European close suggested that the 75% level had been reached suggesting the restructuring will go ahead and a disorderly default averted. The 90% level is the next key milestone, which would apparently mean that the swap could progress without the triggering of the Collective Action Clauses in the Greek-law bonds. It has already been suggested by ratings agencies that the use of CACs will likely cause a credit event. At present, it appears we are in the 75% to 90% range and as such the use of CAC is possible but not inevitable.

There was a also a raft of economic data for digestion, with key interest rate decisions from the Bank of England (BoE) and the European Central Bank (ECB), both deciding to leave their rates unchanged at 0.5% and 1% respectively. Initial jobless claims in America unexpectedly rose last week by 8,000 to 362,000, ahead of expectations of 350,000. Despite three weeks of increases, the 4 week moving average (considered a more reliable indicator) only edged up slightly to 355,000. The latter remains near four-year lows and as such the data was insufficient to concern markets. The figure comes ahead of tomorrow’s release of February’s non-farm payrolls data, a more significant figure which is widely anticipated to show that the economy added 210,000 new jobs in the month of February.

On the corporate earnings front, Wm Morrison was a significant gainer on the index today as the UK’s fourth biggest supermarket chain released a good set of 2011 numbers. Despite warning that 2012 was going to be a tough year, the group’s results showed profit before tax was up 8.4% to £947m on revenue of £17.7 billion. The shares ended the day up by 2.9% to 293p.

The FTSE 100 lost some ground following the slightly weak US data, although made it back up towards the end of the trading day to finish 1.2% higher at 5860.

This was posted in Bdaily's Members' News section by James .