Greece successfully holds first bond sale since 2014, but economists say crisis isn't over – as it happened
All the day's economic and financial news, as Athens sells debt for the first time in three years
- Latest: Greece has sold a3bn of debt in 'absolute success'
- Greece pledges to hold more auctions
- Capital Economics: It's good news, but....
Earlier:
5.30pm BST
The news that Greece has put its toe back into the financial markets, and not seen it bitten off, helped cheer investors in Europe today.
All the main stock markets rallied, with Britain's FTSE 100 ending 57 points (0.8%) higher.
The biggest news for the European markets which improved the sentiment among investors was Greece returning to the bond markets.
The borrowing cost was much lower purely because the risk level is not the same where it used to be. The Greek news also provided fresh tail wind for the euro which broke its 2015 resistance.
5.26pm BST
Journalist Paul Waldie of the Globe and Mail tweets:
More signs of EU turnaround: Greece returns to debt markets for the first time in 3 years, raising a3bn witha new five-year bond.
4.58pm BST
Dimitri Sofianopoulos, capital markets partner at global law firm Norton Rose Fulbright, believes today's auction is a boost for Athens.
"Greece's successful return to the capital markets sends a clear signal that the country is finally turning a corner following its recent bailout programme. The level of investor appetite in the bonds will give Greece further confidence in its future finances."
4.46pm BST
Jennifer McKeown of Capital Economics takes a more sceptical approach to today's bond sale.
The return to markets was timed to take advantage of the drop in borrowing costs following the resumption of Greece's bailout earlier this month. That, in turn, was the result of reform and austerity on the part of the Greek government and signs of an economic recovery.
Banks are in a very precarious state, with deposits yet to return and non-performing loans a serious burden. And crucially, the public debt mountain remains huge, at about 180% of GDP. The Greek government might therefore struggle to finance itself even at current market borrowing costs, which remain significantly higher than the average of 1.5% interest that it now pays on its largely officially-held debt. Unless euro-zone creditors agree to much deeper debt relief than that which is now on the table, it seems fairly likely that Greece will require a fourth bailout when the current one expires next August.
4.08pm BST
European Commissioner Pierre Moscovici has interrupted his trip to Athens to welcome the bond sale results:
1/ 2 Greek return to the markets welcomed by financial investors: this is good news & another positive signal of trust in the Greek economy.
2/2 Let's prepare the full return to markets in summer 2018! #Greece
4.02pm BST
Greece's finance minister, Euclid Tsakalotos, has hailed the success of today's bond auction.
"We know that Greek people have suffered a lot, more than they deserved."
"There will be a second and a third (market foray), to approach August 2018 with confidence and emerge from the bailouts."
3.48pm BST
It's official! Greece has made a successful return to the financial markets.
Athens has sold a3bn worth of its new five-year bond, at a yield (or interest rate) or 4.625%. That's lower than the 4.95% that Greece last sold five-year bonds for, in 2014.
"It reaffirms the positive trajectory of the Greek economy which is making steady steps to exiting crisis and bailout programmes,"
#GREECE | GREEK FIN MIN SAYS THERE WILL BE A SECOND AND A THIRD BOND SALE - RTRS
3.26pm BST
Boom! US consumer confidence has hit its second highest level since 2000.
The monthly measure of American morale, from the Conference Board, has jumped to 121.1 this month from 117.3 in the previous month.
July Consumer Confidence Rises to 121.1 from 117.3: (bucking the recent trend) pic.twitter.com/Y4g8T4Kzar
2.59pm BST
America's stock market has hit another record high in early trading:
BREAKING: S&P 500 opens at new record high on the back of stronger-than-expected earnings reports https://t.co/4ngszVi4iX pic.twitter.com/IF4HK4I5T0
2.34pm BST
Back to Greece....and the latest word is that it has repriced today's bond sale again!
The yield (interest rate) on the five-year debt has been trimmed to 4.625%, down from the original goal of 4.875% (which was cut to 4.75% this morning).
2.01pm BST
Greg Clark, Secretary of State for Business, Energy & Industrial Strategy, has welcomed BMW's decision:
BMW to build Electric MINI in UK. A landmark decision that is a vote of confidence in the workforce and in the determination of 1/2
of our Industrial Strategy to make Britain the go-to place in the world for the next generation of vehicles. 2/2
1.43pm BST
Just in: BMW has decided to build its fully electric version of the Mini in the UK, ending worries that Brexit drive the project overseas.
"This is good news for everybody on the team at Plant Oxford and this addition to the model line-up marks an important next step in the evolution of Mini.
"As the main manufacturer of the Mini three-door, with production expertise built up over many years, it makes sense for us to build this all-electric model.
Breaking excl: New electric Mini to be built at Cowley Plant https://t.co/1ap3xLbazu pic.twitter.com/TzPXug9pVT
A fully-electric version of the Mini is to be built at BMW's plant at Cowley, near Oxford, the car firm has announced pic.twitter.com/kp8ZGHJtR9
1.23pm BST
A video clip of Alexis Tsipras meeting commissioner Pierre Moscovici in Athens has now arrived.
It shows Tsipras telling Moscovici that this is a "special day, the day that Greece is coming back to the markets in a successful way."
I- IIIIIIII III IIIII I1/4II IfII^1I II^3IIII IIIIIIII I^1II^1IIIIII IfII1/4IIII^1II IIIIfII1/4I IfIII IIIIII IIII III II3/4III III III IIIIfI. https://t.co/XaYVOSVNN7
1.01pm BST
It's not all hunky dorey in Greece today, reports Helena.
Firefighters, demanding renewal of short-term contracts, have been out on the streets protesting this morning. The protestors, some in full rescue gear, demonstrated in front of the Greek parliament in Syntagma square demanding that some 1,320 workers be immediately re-hired.
"Greece's cultural treasures, are part of world heritage and one of our competitive tourist advantages. Archaeological sites and museums in Attica and Athens are one of the most basic reasons for the decision to make the journey.
For many travellers, visiting the sites is a life goal since they won't have the opportunity to make such a journey again."
12.06pm BST
Nicholas Wall, portfolio manager at Old Mutual Global Investors, says everyone involved in the Greek debt crisis will be crossing their fingers and hoping for a good result today:
Greece's prime minister, Alexis Tsipras, left behind 'collision economics' a long time ago, and has apparently decided that the best strategy for re-election in 2019 is to exit the bailout programme. For this, he needs economic growth, access to markets and cooperation with European partners.
A successful Greek exit from the aid programme would also be a boon to European policymakers, who have long faced criticism about their approach to the Greek crisis and don't want to ask their taxpayers for more cash when this bailout package expires next summer.
11.55am BST
Analysts at Barclays have predicted that Greece will soon receive "meaningful" debt relief, and (finally) be included in the European Central Bank's bond-buying stimulus scheme.
In a client note about today's bond sale, they say:
The IMF Board approved last week in principle a precautionary Stand-by programme (a1.6bn), to become effective once specific and credible assurances on debt relief are received from Greece's European partners to restore debt sustainability.
Public debt in Greece continues to be deemed unsustainable by the IMF without sizeable further debt relief. We do not expect debt relief measures to be delivered by Europe before the German elections (24 September). We also think that specific and credible assurances on debt relief measures are also a necessary condition for the ECB to include GGBs [Greek government bonds] into the PSPP programme, which is our baseline for 2018.
Barclays calling for ECB to start buying Greek bonds under QE in 2018 pic.twitter.com/6aIpU0NdJ8
11.53am BST
The orders are still coming in....
Greece Is Said To Have Received EUR7B In Offers For 5-Year Bond
11.45am BST
The apparent jump in UK factory output in the last quarter has been welcomed by City experts.
Dennis de Jong, managing director at UFX.com, says it could ease concerns over Britain's economy. However, the EU negotiations remain critical to the manufacturing sector's future.
"After expectations for UK growth were revised down by the IMF yesterday, today's survey data for the manufacturing sector offers some light relief.
"Despite dipping from 16 to 10, the orders balance is sitting at its second highest level in three years and the sector appears to be expanding at a healthy pace.
Upbeat July #CBI #industrial trends survey; #BOE will be pleased to see #price balance dip markedly https://t.co/BkJ476UQPR via @CBItweets
Manufacturing surged in July, according to the CBI. Trouble is, the survey has said that throughout 2017, but official data have been dire: pic.twitter.com/ztDV9kPkoW
11.28am BST
Newsflash: Britain's factories have just posted their strongest quarter of growth since 1995!
Manufacturing output growth hit a 22-year high. Similar growth is expected over the next quarter. #CBI_ITS https://t.co/8mzJjNr87v pic.twitter.com/l2I9Mdc87z
"Output growth among UK manufacturers is the highest we've seen since the mid '90s, prompting the strongest hiring spree we've seen in the last three years. Cost pressures are easing and firms are upbeat about the outlook for export orders.
"It's great to see the benefits from the decline in sterling for UK exporters feeding through. But the flipside is the broader hit to consumer spending power across the economy from stronger inflation, which is likely to have fuelled the slowdown in the economy in Q1 and is expected to pull down growth in Q2."
11.09am BST
Last night the Greek prime minister's office issued a statement explaining why the government had moved ahead with the sale.
It attributed the timing to "a series of positive developments for Greece", and called the market foray an important strategic step in the country's quest to regain "viable and stable access" to international markets.
10.36am BST
EU economic affairs commissioner Pierre Moscovici has now begun talks with prime minister Alexis Tsipras, following this morning's press conference.
"Interest in the bond sale is very high, there is a sense of real optimism.
If it goes as well as we hope we can start talking of the beginning of the end of darkness."
10.29am BST
Financial journalist Owen Sanderson of GlobalCapital has made an important point about today's bond sale:
Quick Greece thread.....why would a heavily indebted country spend a78m of taxpayers' money (plus fees!) on a switch and tender?
It needs to prove "market access" in 2018. Proving market access is in fact retrospective - it must have HAD market access for a year
This is the crucial passage in the offer - you're only going to get your sweet sweet 2.6 points if you show up for the new bond pic.twitter.com/R7A6A7223u
tldr: The cheapness required to guarantee Greece market access is in the tender, not in the new issue
10.20am BST
Newsflash! Greece's bond sale seems to be going well.
Reuters is reporting that more than a5.5bn of bids have been received for Athens' new five-year debt.
10.14am BST
Shares in posh tonic maker Fever-Tree has surged by 9% to a new record high after hiking its profit forecasts again.
Related: Fever-Tree co-founder makes 73m from selling shares
10.14am BST
Back in the City of London, the FTSE 100 has jumped by 57 points, erasing most of yesterday's losses.
As we approach tomorrow's conclusion to the July FOMC meeting, there is likely to be an increased degree of hesitancy for traders, with the FX markets in particular seeing recent trends turn to consolidation given the clear event risk ahead.
The FTSE is being helped by gains in the commodity sector, with the likes of Anglo American, BHP Billiton, and Antofagasta amongst the firms near the top of the leader board. The dollar weakness story of late is certainly a help for commodity prices, with copper and gold in particular gaining ground this week.
9.45am BST
Finally, Pierre Moscovici is asked about the collapse in support for the socialist party in France, for which he was a former finance minister.
There is a need for social democracy in Europe, he replies, but we need to have ideas that are attractive, credible, reformist and pro-European.
What matters first and foremost is the future of this great country, inside the eurozone, inside Europe whoever runs it.
9.34am BST
I think Pierre Moscovici may have been watching the Tour De France.
Confidence in Greece is really coming back, but we need to continue the good work.
We need to be on the bicycle, and keep on pedalling. That's the case for Europe as a whole.
9.22am BST
Moscovici is also asked about debt relief, a long-held demand for Athens.
He says that Greece's creditors must respect the measures agreed at the latest eurogroup meeting (they agreed to 'recalibrate' Greece's debt pile, extending the maturity of some bonds)
9.16am BST
European Commissioner Pierre Moscovici is giving a press conference in Athens now.
8.55am BST
Newsflash: Greece's five-year bond sale has begun.
And we can now see that Athens has priced this debt sale at a yield of 4.875%.
New greek bond likely to have 4.875% coupon#bonds #Greece pic.twitter.com/zlKODxLENi
#Greece is out with new gov debt bond 5y at 4.875% area.
Another sign of madness in financial markets after Argentina 100y bond
8.45am BST
Pierre Moscovici has also met with Greek opposition leader Kyriakos Mitsotakis, whose New Democracy party are leading the opinion polls.
According to this tweet, they discussed how to 'ensure the success' of Greece's bailout programme.
Tite-i-tite politique et franc avec @kmitsotakis, leader de @neademocratia pour assurer la ri(C)ussite du programme et de la #Grice pic.twitter.com/WIVJitHLwS
Discussion convergente avec gouverneur Stournaras sur les paramitres i(C)conomiques et bancaires #bankofgreece pic.twitter.com/U24QBy0h2D
8.36am BST
European commissioner Pierre Moscovici is visiting Athens today to hold talks with top political figures, and discuss Greece's future.
He has already met with president Prokopios Pavlopoulos, who reminded Moscovici that Greece is determined to get debt relief.
We will meet our commitments and when the time comes the partners will do what they have to do on the debt issue, Greek President Prokopios Pavlopoulos said on Tuesday in a meeting with EU Commissioner for Economic and Finance Affairs Pierre Moscovici who is paying a visit to Athens.
On his part, Moscovici said: "We want Greece to return to normality and stay on course. You can count on us."
Rencontre toujours passionnante avec le Pri(C)sident grec, un Europi(C)en convaincu et engagi(C) pic.twitter.com/HAS0voRpS9
8.20am BST
Some financial experts have given Greece's bond sale a thumbs-up.
Lutz Roehmeyer of Landesbank Berlin Investment says it is "perfect timing".
"It is after getting bailout money, after getting the go ahead for a debt reduction next year, after IMF said it is likely to join the bailout finally, after S&P rating action and still before ECB ends QE and started raising rates."
"They've been doing well,"
"Psychologically, yields are below levels when they last came to the market. And it's a good time to issue because if ECB starts tapering post summer, peripherals would come under pressure."
8.04am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
#Greece finds out today how 1st foray into bond mkt since '14 went. Yield, subscription & quality of investors = key https://t.co/oOxPxjKW3F
Related: Greece plans return to bond market as Athens sees end in sight to austerity
"This decision is a significant step, part of Greece's strategy to regain viable and steady access to international markets."
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