London: World stocks and commodities rose yesterday as stronger US retail sales boosted optimism about the economic recovery, while the euro recovered on speculation that debt-stricken Greece may soon receive help.
Greece's borrowing costs eased, though they remained at elevated levels.
"People are buying the euro on speculation the IMF may step in," said Geoffrey Yu, currency strategist at UBS in London.
Yu said any aid to Greece would likely trigger a relief rally in the euro, which has fallen more than 6 per cent against the dollar so far this year on the back of the Greek debt crisis.
The single currency gained 0.4 per cent versus the dollar at $1.3405. Global equities measured by the MSCI All-Country World Index advanced 0.5 per cent, snapping a two-day losing run.
Rebound
The pan-European FTSEurofirst 300 index rebounded 1.1 per cent after posting its biggest one-day decline in six weeks, while Greece's share benchmark put on 0.8 per cent.
Earlier, Asian stocks outside Japan edged closer to a 22-month high.
The positive US economic indicators also boosted commodity prices, with oil snapping two days of losses to trade above $86 a barrel, while copper prices gained 0.9 per cent.
Gold rose 0.4 per cent, extending its gains to a fifth day and heading for its biggest weekly rise since early January. The premium investors demand to buy Greek government debt rather than euro zone benchmark German Bunds was at 413 basis points, down from Thursday's high of 465 basis points. The still elevated yields reflected continued fears Greece would face a liquidity crunch.
The Greek 2/10 yield curve remained inverted with two-year bond yields above those of 10-year bonds, signalling worries of a near-term liquidity crisis.
Investors dumped Greek assets on Thursday, betting the country would have to ask the European Union and International Monetary Fund to implement a support package, even as Athens sought to reassure markets it was not at risk of going bankrupt .
Treasury yields
Yields on 10-year benchmark US Treasuries were steady at 3.89 per cent, while those on 10-year Bunds were up 1 basis points at 3.122 per cent.
The yen slipped broadly as traders trimmed long positions in the Japanese currency on the view that its rise the previous day on talk of a yuan revaluation in the near term was overdone.
The dollar was up 0.2 per cent against the yen at 93.52.
Spot yuan was flat against the dollar, showing no sign that a revaluation was imminent after closing at its highest level since October on Thursday.
