July 12, 2015 / 10:54 PM / 2 years ago

Euro slips, bonds bid as Greece crisis drags on

People are reflected in a board displaying market indices in Tokyo July 10, 2015. REUTERS/Thomas Peter

SYDNEY (Reuters) - The euro slipped in early Asian trading on Monday while top-rated bonds caught a safe-haven bid as the Greek debt crisis seemed set to rumble on for yet another week while a key reading on economic growth loomed for Chinese markets.

The moves were modest, with investors wary of overreacting after having seen so many deadlines come and go with no resolution of the crisis in Greece. After an initial 0.5 percent drop to $1.1090 EUR=, the single currency quickly regained its footing to $1.1130.

Likewise, the euro pared its losses against the yen to stand at 136.65 EURJPY= after an early dip to 135.40. The U.S. dollar barely budged against a basket of currencies at 95.957 .DXY.

Demand for sovereign debt lifted U.S. 10-year Treasury futures <0#TY:> 9 ticks, while the S&P EMINI U.S. stock contract lost 0.4 percent ESc1.

Aiding the euro were rumors the European Central Bank had agreed to delay a Greek repayment of 3.5 billion euros that had been due on July 20.

Hopes for some resolution to the Greek drama were dashed on Sunday when euro zone leaders told the cash-strapped Greek government it must enact key reforms this week to restore trust before they will open talks on a financial rescue.

Six sweeping measures including tax and pension reforms must be enacted by Wednesday night and the entire package endorsed by the Greek parliament before talks can start.

Asian investors will also be anxiously watching to see if China’s stock markets can stabilize after a barrage of government support measures sparked a much-needed bounce.

After a run of torrid losses the CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen ended the week with a gain of 5.7 percent.

Sentiment will be tested by economic data on China’s trade flows later on Monday, and the always sensitive gross domestic product report on Wednesday.

Forecasts are that the world’s second largest economy slowed to 6.9 percent last quarter, making it harder to meet Beijing’s target of 7 percent for the whole year. ECONCN

In commodity markets, gold failed to get much of a safety bid, easing over a dollar to $1,161.83 an ounce XAU=.

Oil prices were under pressure, with Brent off 82 cents to $57.91 a barrel LCOc1 and U.S. crude off 86 cents at $51.93.

Editing by Paul Simao

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