02/07/2015 04:13 AST
Global equity markets jumped and safe-haven bonds fell on Wednesday after Greece's prime minister signaled he was prepared to accept the bulk of a bailout offer, while stronger-than-expected data on private U.S. jobs growth bolstered the dollar.
Prime Minister Alexis Tsipras told international creditors that Athens could accept the bailout if some conditions were changed, but Germany said it could not negotiate while Greece was headed for a referendum on the aid-for-reforms deal.
Major European stock indices surged 2 percent or more, with Germany's DAX gaining more than 3 percent.
On Wall Street, the Dow Jones industrial average rose 120.73 points, or 0.69 percent, to 17,740.24. The S&P 500 gained 13.95 points, or 0.68 percent, to 2,077.06 and the Nasdaq Composite added 38.57 points, or 0.77 percent, to 5,025.44.
MSCI's all-country equities world index rose 0.87 percent, while its emerging markets index gained 0.08 percent.
"Investors are taking a collective sigh of relief that an armageddon type of scenario did not occur with respect to Greece," said Adam Sarhan, chief executive of Sarhan Capital in New York. "The markets are also rallying from deeply oversold level."
The price of battered bonds from southern European countries rose, while safe-haven bonds such as U.S. Treasuries and German bunds fell. The euro was lower after Greece's default overnight on its International Monetary Fund loans had weakened the single currency by about half a percent.
The benchmark 10-year Treasuries note fell 24/32 in price to yield 2.4219 percent. German 10-year Bund yields were up at 0.829 percent.
Yields on bonds issued by Italy, Spain and Portugal, the countries most vulnerable to contagion from Greece's debt crisis, all fell.
The dollar gained on news that U.S. private employers had ramped up their hiring in June, a further sign of an improving labor market that adds weight to the notion the Federal Reserve will raise interest rates later this year.
The ADP National Employment Report showed 237,000 private-sector jobs were created last month, handily exceeding expectations of 218,000 new jobs, according to a Reuters survey of economists.
The ADP data comes a day before the U.S. Labor Department's more comprehensive non-farm payrolls report on Thursday, which is expected to show 230,000 new jobs were created last month, down from the 280,000 increase in May.
"There’s potential for an upside surprise in payrolls given the read we got from ADP," said Mark McCormick, currency strategist at Credit Agricole in New York. "The fundamentals are supportive of broad dollar strength, particularly angst the euro. "
The dollar was up 0.56 percent to $1.1073 against the euro, and the greenback gained 0.52 percent to 123.13 against the yen.
Oil fell below $63 a barrel after Greece defaulted on its IMF debt, while U.S. and production by members of the Organization of Petroleum Exporting Countries hit new highs.
Brent crude was down 79 cents at $62.80 a barrel at 1316 GMT. U.S. crude fell $1.26 to $58.21.
"The oil market is being literally flooded with OPEC crude oil at present," said Carsten Fritsch, analyst at Commerzbank.
Reuters
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