U.S. share futures leap as Greece offers new reform deal

Sun Jun 21, 2015 7:38pm EDT
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By Hideyuki Sano

TOKYO (Reuters) - U.S. stock futures jumped in early Asian trade on Monday after Greek Prime Minister Alexis Tsipras offered a new package of reforms to foreign creditors - a ray of hope for a last-minute deal at the emergency euro zone summit meeting later in the day.

But many investors were still cautious because it was not immediately clear how far the new proposal yielded to creditors' demands for additional spending cuts and tax hikes, nor whether creditors can stomach the offer.

"Greece will be reaching a climax this week and markets will be extremely nervous. The markets are on the whole moderately hopeful on a deal. But it is difficult to tell the outcome as this will be a highly political decision," said Masakazu Kabeya, chief global strategist at Daiwa Securities.

U.S. stock futures ESc1 price rose 0.5 percent from Friday's close to 2,107.75. The euro EUR= also ticked up 0.2 percent to $1.1366, inching closer to a one-month high of $1.1440 hit on Thursday.

U.S. Treasuries futures TYc1 fell 8.5/32 or 0.2 percentage point in price to 126-10.5/32 as hopes rose, erasing Friday's nervous gains.

The Nikkei futures NIYU5 contract in Chicago is trading almost flat from Tokyo close on Friday.

Locked out of bond markets and with bailout aid frozen since summer last year, Athens is running out of cash to repay a 1.6 billion euro IMF loan due at the end of the month unless it gets new financing from international creditors.

Speculation is rife that, if no deal were reached on Monday, Greece may need to impose capital controls on Tuesday to avert a banking crisis as savers keep withdrawing funds from banks.   Continued...

An employee looks at monitors at the Tokyo Stock Exchange (TSE) in Tokyo June 11, 2015.  REUTERS/Thomas Peter