LONDON (AP) — Greece’s decision to bundle together its upcoming repayments to the International Monetary Fund roiled financial markets Friday as investors fretted over the possibility of a Greek debt default and the country’s exit from the euro. U.S. jobs figures later will provide investors with a distraction from the mounting uncertainty over Greece’s financial future.
KEEPING SCORE: In Europe, Greek shares led the way lower with the benchmark Athens index down 5 percent. Elsewhere, France’s CAC 40 slid 1.5 percent to 4,912 while Germany’s DAX fell 1.4 percent to 11,180. Britain’s FTSE 100 fell 0.9 percent to 6,793. U.S. stocks were poised for a lower opening with Dow futures and the broader S&P 500 futures down 0.5 percent.
GREEK TURMOIL: The decision Thursday by the Greek government to bundle together its four payments totaling 1.6 billion euros ($1.8 billion) due to the International Monetary Fund this month into one on June 30 raised fears across markets that the country’s financial position is even worse thought, threatening its place in the euro. It’s the first time a developed economy has taken the option of bundling payments together — an emergency maneuver that’s allowed by the IMF but taken up last by Zambia in the 1980s. Prime Minister Alexis Tsipras is scheduled to address an emergency session of parliament Friday as discontent rises within his party.
ANALYST TAKE: “Last night’s sudden change of mind has raised the stakes even further as this high stakes game of Jenga goes on between Greece and its creditors,” said Michael Hewson, chief market analyst at CMC Markets. “One false move from one side or the other, and the whole fragile edifice could well come tumbling down.”
AMERICAN JOBS: Though clearly focusing on the developments surrounding Greece, investors have key U.S. data to digest before Wall Street opens for business. May’s nonfarm payrolls data could well set the market tone for a while as investors assess when the Federal Reserve will start raising interest rates. Economists predict that employers added 227,500 jobs in May and the unemployment rate will hold steady at 5.4 percent. “Having seen the previous three sets of figures being revised lower, and the slightly cooler economic data releases the U.S. has had, expectations could be forgiven for dropping a little,” said Alastair McCaig, market analyst at IG.
CURRENCIES: The payrolls data could have a big bearing on the dollar. Ahead of the figures, the euro was flat at $1.1225 while the dollar rose 0.2 percent 124.79 yen.
ASIA’S DAY: Tokyo’s Nikkei 225 fell 0.1 percent to close at 20,460.90 and South Korea’s Kospi fell 0.2 percent to 2,068.10. Hong Kong’s Hang Seng dropped 1.1 percent to 27,260.16 and Australia’s S&P/ASX 200 slipped 0.1 percent to 5,498.50. Southeast Asian benchmarks were also mostly lower but the Shanghai Composite Index in mainland China gained 1.5 percent to 5,023.10.
ENERGY: As traders awaited the latest decision to OPEC, benchmark U.S. crude rose 50 cents to $58.50 a barrel in electronic trading on the New York Mercantile Exchange. OPEC is expected to keep its production unchanged at 30 million barrels a day. Brent crude, a benchmark for international oil used by many U.S. refineries, rose 50 cents, too, to $62.532 in London.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.