U.S. Stocks Push Higher As 10 Year Treasury Yield Surges, Greek Bailout Deal Remains At Impasse

ASU.S. equities are rebounding and the euro is advancing against the dollar as the sell-off in German bunds appears to be helping to drive the euro higher on Wednesday.

The 10 year German yield broke through the 1 percent level and is approaching levels not seen since late September on the heels of improving inflation data last week from the euro area combined with comments from ECB President Mario Draghi.

The U.S. 10 year Treasury is facing selling pressure alongside the global selloff with bonds and moved higher again on Wednesday following last Friday’s better than expected jobs report that raised expectations the Federal Reserve will begin to hike interest rates in late 2015.

The yield on the 10 yr. Treasury surged today to 2.49 and reached levels not seen since late September.

On Tuesday European officials rejected a Greek bailout proposal that fell short of budget targets agreed earlier in a June 3rd meeting with its creditors.

The Greek proposal imposed new demands on Greece’s creditors and failed to accept the conditions attached to a €7. 2 billion bailout disbursement from its international creditors that is due before Greece’s temporary bailout extension expires on June 30th.

Bloomberg cited an international official today who explained that Greece’s new demands for reforms includes access to €10.9 billion   from the European Finance Stability Facility, allow banks to buy more short-term debt, and request €6.7 billion in new European Stability Mechanism (ESM) funds to pay the ECB on loans that are due in July and August.

Greek officials have said that its international creditors have failed to respond to its latest bailout proposal that was given to EU Commissioner Pierre Moscovici late on Monday evening.

German Chancellor Angela Merkel and French PM Francois Hollande are scheduled to meet today with Greek PM Alexis Tsipras on the sidelines of an EU-Latin America Summit today in Brussels.

-Johnathan Schweitzer



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