Greece passes austerity measures, as markets recover from Trump slump - as it happened

• UK factory orders at highest level since 2015
• Moody's maintains stable rating on Portugal
• Oil bubbles up on hopes of extension to output deal
• Greek parliament backs pension cuts and tax hikes

2.03pm BST

Time for a quick round-up.

Ahead of Monday's eurogroup meeting, Greek MPs have passed a series of new austerity measures introduced to help release the latest tranche of bailout funds from the country's creditors. While the forthcoming get together of finance ministers is likely to be a long and possibly contentious one, the Athens stock market welcomed the Greek vote and is currently up 0.25%.

1.17pm BST

Looking ahead to Monday's eurogroup meeting, which will discuss the Greek debt situation (yet again):

Eurozone diplomat predicts long and difficult Eurogroup on Greece to find solution on debt that everyone can accept.

Diplomat urges presence of @Lagarde as this is crucial phase of negotiation and deal would need her authority

1.00pm BST

The pound is now back above $1.30, up 0.57% at $1.3009. Chris Saint, senior analyst at Hargreaves Lansdown Currency Service, said:

The pound lost ground yesterday afternoon but remains on course for weekly gains against the US dollar, having tiptoed back above the psychologically important $1.30 level in early European trade today.

The lingering political storm in the US surrounding President Trump continues to heap some pressure on the dollar, casting doubts over whether he can deliver the pro-growth economic reforms which were supporting expectations for the Federal Reserve to carry on lifting interest rates gradually this year.

12.13pm BST

European markets are managing to stay in positive territory, while on Wall Street the Dow Jones Industrial Average is forecast to open marginally higher. Connor Campbell, financial analyst at Spreadex, said:

The gentle return to positive trading continued this Friday, the European indices all reclaiming some of the week's losses.

The FTSE kept hold of its 30 point rise as the morning progressed, though the UK index still couldn't find the energy to re-cross the 7500 mark. The pound was even perkier, surging half a percent against the dollar to once again surpass $1.30...

11.45am BST

The pound has edged up above $1.30 for the second day in a row, but can it hold on to that level?

Watch #GBPUSD around 1.3000 - yesterday's temporary break above this hurdle was rejected. Was that a false break reversal? #FX ^FR

Now that #GBPUSD is back at 1.3000, today's price action should tell us the answer. We are wary of a possible move lower again here #FX ^FR https://t.co/v16tyeDaUB

11.38am BST

The CBI survey is an encouraging sign, says economist Howard Archer at IHS Markit:

[It] fuels hopes that the UK economy is on course for some pick-up in growth in the second quarter after GDP expansion more than halved to 0.3% quarter-on-quarter in the first quarter. Hopes of improved second quarter growth got a significant boost from retail sales picking up markedly in April, although they were helped by warmer weather and serious concerns remain over the squeeze on consumer purchasing power.

It needs to be borne in mind that manufacturing output only accounts for 10.3% of UK GDP and that surveys on the sector have recently tended to be stronger than the hard data.

11.12am BST

Back in the UK, and some positive economic news.

Factory orders are growing at their fastest rate since February 2015, according to the latest industrial trends survey from the Confederation of British Industry. The order book balance for May came rose to +9 from +4 in April, compared to expectations of a flat reading.

Output volumes grow at the fastest pace since December 2013. #CBI_ITS #UKmfg https://t.co/avzHu4YDuq pic.twitter.com/RhRkqW6wtf

The summer sun has come out early for Britain's manufacturers. Robust demand at both home and abroad is reflected in strong order books, and output is picking up the pace.

On the other side of the coin though, we have mounting cost pressures and expectations for factory-gate price rises are running high.

10.35am BST

The media this morning is of the view that time is very much of the essence if emergency bailout funds are to be disbursed before Greece's a7.5bn debt repayment matures in July, reports our correspondent Helena Smith:

While issuing a statement saying the ball is now in the creditors' court, the Greek prime minister Alexis Tsipras has also attempted to soften the blow of measures his government would never normally endorse by shifting the narrative to the issue of debt.

Ahead of the vote, the leftist leader enthused that soon he could be "forced to wear a tie".

The German media this morning, in extensive coverage of the latest cost-cutting measures Greece has legislated, describes debt relief as the ace up Tsipras' sleeve. With the systematic passage of policies his Syriza party once vociferously vowed to expunge, the popularity of the leftist-led government has plunged dramatically with the centre-right main opposition New Democracy party leading by 10 % in the latest Prorata opinion poll commissioned by the leftist Syntaktwn newspaper.

During the often boisterous debate that preceded Thursday's late night vote Tsipras insisted that the controversial pension cuts and tax reforms MPs were being called to support would not be implemented if debt relief was not forthcoming.

Senior European officials are quoted this morning as saying they are now in a race against the clock. Speculation of a comprehensive deal being deferred to June 15 when the eurogroup next meets would, they say, be too late for the process of having emergency bailout funds ratified by European governments and disbursed in time for the a7.5bn debt repayment in July. Everything will depend on the International Monetary Fund being brought on board and with ongoing disagreement over the ability of Greece's economy to grow - vital to calculating debt relief - that is far from sure.

The Washington-based organization has said repeatedly that without Greece's debt being made sustainable, it will not sign up to the bailout. If that happens European officials say there will be no tranche for Greece. "It may be a difficult night," Tsipras said referring to Monday's eurogroup meeting.

10.04am BST

Here's a downbeat assessment of Greece and the eurozone from Swissquote Bank's Yann Quelenn, despite the country's parliament approving the latest austerity measures:

It has been a while since Greece was at the top of the market news. We consider this is as a key issue for the European Union so we are still monitoring the country. It is now back into recession (printing two consecutive growth negative quarters) despite the massive austerity policies over the last few years

Pension cuts or the increase in taxes do not seem to be sufficient and the cost of servicing the debt is way too massive so we do not see any positive issue on that. Greece cannot devalue its currency and so it is then forced to devalue internally, for instance its public aid (pensions in particular).

9.50am BST

Good news - mainly - for Portugal.

Moody's has kept the country's credit rating at Ba1 with a stable outlook in its annual analysis. This reflects Portugal's economic recovery and stronger labour market, countered with its very high government debt.

Portugal's credit profile is supported by the economic recovery, its return to private capital markets, the economy's diversification and relatively high average wealth levels. Portugal's key credit constraint relates to its very high government debt. Although we expect debt to start declining as a share of GDP this year, any debt reduction will only be gradual.

9.38am BST

Over in Greece, the Athens market has greeted the news of the austerity vote positively. It is currently up 0.67% at 787.53.

9.32am BST

Oil prices are rising ahead of a meeting of Opec producers next week, as hopes grow that a production cut agreed in November could be extended by nine months to March 2018.

Both Saudi Arabia and Russia, key producers, recently suggested such an extension was possible, pledging to do "whatever it takes" to tackle a supply glut. Even though US shale producers are taking up some of the slack from output cuts elsewhere, the prospect of such an extension is supporting crude prices.

Markets currently price in a nine-month extension in OPEC/Russia production cuts and the $50 level has been a reasonable target for those who took the oil recovery bet. [An] additional rise toward the $53/$55 is expected to be bumpier as it would certainly require deeper output cuts and/or any positive surprise at the May 25 meeting.

8.21am BST

As the markets end the week on a slightly more positive note, David Morrison, senior market strategist at Spreadco, said:

There's a general feeling of relief that the US-led sell-off didn't accelerate last night. Instead, all the major US stock indices managed to post modest gains despite earlier weakness. It may be too soon to sound the all-clear but so far investors are doing exactly what they've done for the past eight years: using any significant pull-back in equity markets as a buying opportunity.

But what will be of interest is to see if this bounce-back has the strength and conviction to push the indices back up towards or beyond recent record highs. Most of the trading gaps which formed after the first round of the French presidential election have now been filled.

8.14am BST

With the overnight recovery on Wall Street after Wednesday's slump and a relatively positive performance in Asia - the Nikkei 225 ended up 0.19% - European markets are also making a positive start to trading.

The FTSE 100 is up 24 points or 0.33% although pharmaceutical group Hikma is down 6% after cutting its revenue forecasts following a delay to a US drug launch. This takes its total fall this week to 10% so far.

8.06am BST

The pound rose above $1.30 on Thursday for the first time since September, but it did not manage to hold that level. Konstantinos Anthis at ADS Securities said:

The pound has had a turbulent 24 hours. A rally through the 1.3000 level yesterday took it to 1.3050 but a few hours later it collapsed to 1.2900 and ended the day around 50 pips higher. The mini flash crash was not related to any particular data set, so the drop was probably down to a combinations of factors. Sterling has risen around 7.5% in value over the past 30 days so the drop may have been traders taking money off the table, or it could have been down to the launch of the Conservative manifesto and the words of Theresa May.

7.42am BST

Good morning and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Greece's parliament has agreed to the latest austerity measures demanded by its creditors to unlock the next tranche of financial aid.

We deserve and we expect from Monday's eurogroup a decision regulating debt relief which will correspond to the sacrifices of the Greek people.

The Eurogroup will be informed about the preliminary agreement reached on 2 May between Greece and the institutions (the European Commission, the European Central Bank, the European Stability Mechanism and the International Monetary Fund) on a new set of policy reforms in the context of Greece's economic adjustment programme, financed by the European Stability Mechanism.

The agreement is one of the steps towards completing the ongoing second review of the programme and paving the way for the next disbursement of financial assistance to Greece by the European Stability Mechanism.

Our European opening calls:$FTSE 7462 +0.34%
$DAX 12607 +0.13%
$CAC 5301 +0.21%$IBEX 10705 +0.19%$MIB 21341 +0.20%

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A political scandal of this scale is going to stay hanging over Mr Trump for some time, and even if nothing comes of it in the end, it's going to be a long and drawn out process. Having this story lingering away will be enough to unsettle traders.