Greece to repay IMF, European stocks at seven-year high

LONDON | By Jamie McGeever

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange April 8, 2015.

Reuters/Staff/remote

(Reuters) - World stocks marched higher on Thursday, lifted by Greece's confirming it will pay a 450 million-euro loan tranche to the International Monetary Fund and growing expectations the U.S. will not raise interest rates until the latter part of the year.
European markets also welcomed German industrial output and trade data, which showed the continent's largest economy ticking along nicely in February.
The Greek news and U.S. interest rate outlook soothed global bond market sentiment, too. The benchmark euro zone bond yield on 10-Germany's 10-year Bund fell to a record low of 0.146 percent DE10YT=TWEB.
At midsession, Europe's EuroFirst 300 index of leading shares was up 0.7 percent at a seven-year high of 1,623 points .FTEU3, putting the index on track for its
ninth weekly gain in the last 10.
Britain's FTSE 100 .FTSE was up 0.8 percent at 6,995 points and Germany's DAX .GDAXI was 0.5 percent higher at 12,097 points.
"While the risk of a Greek exit remains high, European equities continue to be supported by extremely low core euro area yields which remain at the bottom of recent ranges," Barclays said in a note on Thursday.
Figures on Thursday showed that German industrial production rose and imports and exports both grew faster than expected in February. Auto industry figures published late on Wednesday showed the sector's recovery is broadening to France, Spain, Italy and Portugal.
Earlier in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.7 percent to its highest since mid-September. That marks nine straight winning sessions, its best run since September 2013.
Japanese stocks rose 0.75 percent to a 15-year high, while Hong Kong .HSI powered up 2.7 percent to a seven-year peak. Hong Kong is up nearly 7 percent so far this week, by far its best week since December 2011.
Futures pointed to a lower open on Wall Street, however, with investors concerned that the recent strength of the U.S. dollar will have a detrimental effect on the first-quarter earnings season, which got underway on Wednesday SPc1.
UK ELECTION JITTERS SOAR
In bonds, benchmark 10-year U.S. Treasury yields slipped to 1.88 percent US10YT=RR. Greek yields fell as Athens confirmed it will meet its IMF repayment deadline and Spain sold 4.7 billion euros of bonds at record low yields.
Currency traders focused on the "hawkish" side of the Federal Reserve's last policy meeting minutes, which suggested a June rate hike is still on the table. The dollar index .DXY was up 0.2 percent, its fourth consecutive daily rise and its longest winning streak in three months.
Fed officials acknowledged risks from overseas and a weak start to the year at their March meeting. But they remained confident enough in the strength of the recovery to continue laying the groundwork for an interest rate hike later this year, according to minutes from the meeting released on Wednesday.
"The speed of the dollar's appreciation from July through to March was the fastest since 1980-81," said Derek Halpenny, a currency strategist at BTMU in London.
"A repetition of that going forward is very unlikely and the dollar will therefore play less of a role in (U.S.) GDP and inflation than over the last three quarters," he said.
The euro fell further from around $1.10, down 0.1 percent on the day at $1.0765 EUR=. Sterling shed 0.2 percent to $1.4835 GBP=.
Volatility in sterling options markets rose to levels not seen for years, as investors sought protection against swings in the currency as Britain's May 7 general election approaches.
One-month euro/sterling and sterling/dollar volatility both rose to their highest since 2011.
Opinion polls show the ruling Conservatives and the opposition Labour neck-and-neck, making a hung parliament and a lengthy period of uncertainty likely.
The Bank of England left interest rates on hold at a record low 0.5 percent, as expected, meaning rates have remained unchanged for the entire length of the current parliament.
Crude oil took back some lost ground following a plunge overnight triggered by a rise in U.S. stocks and news of record Saudi oil production. [O/R]
U.S. crude CLc1 was up 2.2 percent at $51.54 a barrel after shedding nearly 7 percent on Wednesday. Brent LCOc1 rose 2.8 percent to $57.12.
(Reporting by Jamie McGeever; Editing by Larry King; To read Reuters Global Investing Blog click here; for the MacroScope Blog click on blogs.reuters.com/macroscope; for Hedge Fund Blog Hub click on blogs.reuters.com/hedgehub)