ATHENS: Greece is expected to return to the bond markets in 2018, but having secured its third bailout program Athens may test the waters by issuing a new bond as early as Monday.
Greek newspapers have been speculating that a bond market test could come in “a matter of days.”
“Monday is probably the day even though nothing can be taken for granted,” Avgi, the ruling Syriza party newspaper said on Saturday.
The conservative Kathimerini newspaper reported that Athens appears willing to “take advantage of the current positive conjecture in the markets.”
It said that markets are in a mood for taking risks right now and there are high levels of liquidity.
It seems to be a toss-up whether Athens will take the plunge or not.
“It is being discussed... Preparations are made for both scenarios and whatever happens we will be ready,” a source with knowledge of the government’s plans told AFP on Friday.
Greece has no immediate need to draw money from the bond markets. The European Stability Mechanism (ESM) will keep feeding the debt-ridden country with low rate loans until the end of the bailout program in July 2018.
This funding gives Athens the chance to test without major risks its credibility in the capital markets after a tumultuous period of Grexit scares, hard decisions and painful reforms.
And last week euro zone finance ministers approved the latest €8.5 billion ($9.7 billion) disbursement, just in time for Athens to meet major debt repayments and avert a default.
The Greek economy nearly collapsed in 2010 under a mountain of debt and it had to be bailed out by its euro zone partners three times to prevent it bringing down the single currency bloc.
According to European Commission figures the tide is turning for Greece. It ran a budget deficit of 15.1 percent in 2009, which had been turned into a surplus of 0.7 percent last year, and it is expected to post further progress this year as more savings are found.
The EU, in a further boost for Athens, recommended Wednesday that Greece has made enough progress in balancing its budget to be removed from the EU “deficit blacklist,” the special oversight of government spending.
Also, the Eurogroup’s statement last month paves the way for Greece to return to the markets by stressing that “future disbursements should cater not only for the need to clear arrears but also to further build up cash buffers to support investors’ confidence and facilitate market access.” Some creditors also seem to be supportive of an imminent market test for Greece.
Klaus Regling, ESM managing director, said on Monday that it was “a good moment” for Greece to consider how to return to capital markets, pointing out that Ireland, Portugal and Cyprus had done so “before the end of their (bailout) programs.” “Greece’s return to the markets is the step that everyone is waiting for,” European Commissioner for Economic and Monetary Affairs Pierre Moscovici said on Wednesday.
But other voices are cautioning Athens not to jump into the capital waters too soon.
Bank of Greece Gov. Yannis Stournaras said on Tuesday that it was “rather early” for a return to the bond markets.
In an interview with the Wall Street Journal, he said: “It would be even better, for instance, if Greece proceeds with two or three emblematic privatizations in the period to come. That would be more helpful to tap markets later.”
Also, market sentiment may become volatile from September given possible changes in European Central Bank (ECB) monetary policy or in Germany’s election results, the Katherine daily noted.
Last time Greece issued bonds was in 2014 under the coalition government of Antonis Samaras with a yield of 4.95 percent.
Greece may be heading for bond market test ‘in days’
Greece may be heading for bond market test ‘in days’
US pump prices surge as Iran war upends global energy supply
- Fuel prices jump over 10 percent as oil prices surge
- Analysts predict further price rises due to market conditions
MARIETTA/NEW YORK : US retail gasoline and diesel prices are soaring as the US-Israel war with Iran constrains oil and fuel exports, which could be a political test for President Donald Trump’s Republican Party ahead of midterm elections in November.
Fuel prices jumped more than 10 percent this week as oil rose above $90 a barrel, its highest in years, adding pain at the pump for consumers already strained by inflation.
Trump on Thursday shrugged off higher gasoline prices in an interview with Reuters, saying “if they rise, they rise.”
The president had vowed to lower energy prices and unleash US oil and gas drilling during his second term, but much of his tenure has been marked by volatility and uncertainty amid shifts in policies like tariffs and geopolitical turmoil.
The US is the world’s largest oil producer. It is a major exporter but also imports millions of barrels a day since it is the world’s largest oil consumer.
As of Friday, the national average prices for regular gasoline stood at $3.32 a gallon, up 11 percent from a week ago and the highest since September 2024, according to data from the motorists association AAA. Diesel was at $4.33, up 15 percent from a week ago, surging to the highest since November 2023.
Midwest, south feel the pinch
US motorists in parts of the Midwest and the South, including states that supported Trump, have seen some of the steepest increases in fuel costs since the conflict in Iran started.
In Georgia, a swing state, average retail gasoline prices rose 40.1 cents a gallon over the past week, according to fuel tracking site GasBuddy.
Andrenna McDaniel, a health care insurance worker in South Fulton, Georgia, said she was surprised to see prices skyrocket overnight.
“They jumped up so quickly,” she said on Friday, adding that she does not agree with the war at all.
McDaniel, a Democrat, said that for now she is only driving for the most important things, and feels lucky that she works from home so she does not have to drive as much as other people do. Georgia voted for Donald Trump in the 2024 election.
Trump voter Richard Soule, 69, a US Air Force veteran and a retired firefighter, said a little pain at the pump is worth Trump’s efforts to protect America.
“When President Trump went in there and bombed out their nuclear, and they just thumbed their nose at it, I believe he did the right thing at the right time,” Soule said on Friday as he filled up his Ford F-150 truck in Marietta, Georgia.
Other states, including Indiana and West Virginia have seen prices rise by 44.3 cents and 43.9 cents, respectively.
Prices may rise further
More pain may be on the way, analysts said, as oil prices continue to trend upward. On Friday, US oil futures settled at $90.90 a barrel, up nearly $10 and the biggest single-day rise since April 2020.
“Given current market conditions, the national average price of gasoline could climb toward $3.50 to $3.70 per gallon in the coming days if oil continues rising and supply disruptions persist,” GasBuddy analyst Patrick De Haan said.
The disruptions in the Middle East and the Strait of Hormuz, a key trade conduit, have boosted demand for US oil abroad, which in turn has driven up prices for domestic refiners too.
“The US has weaned itself off of its dependence on Middle Eastern crude, but obviously Asian refineries, and to a lesser extent, European refineries have not,” Denton Cinquegrana, chief oil analyst with OPIS. “That’s what you’re seeing happen in the spot market, because the demand for US exports rise, and so the price rise.”
Seasonal factors could add further pressure. Gasoline prices typically go up in the spring and peak in the summer due to higher gasoline demand and production of summer-blend gasoline, which is more costly to produce. Diesel fuel saw an even more aggressive jump since Iran began retaliating against US and Israeli strikes, significantly disrupting shipping in the Strait of Hormuz.
Global diesel inventories have remained in tight supply due to heavy demand for heating and power generation during a prolonged winter in the US and other parts of the world and a structural tightness of refining capacity. Sticker prices of everything from food to furniture go up when the cost of diesel goes up, as the fuel is mainly used in freight transportation, manufacturing, agriculture, and global shipping, analysts said.
“In a world where buzzword seems to be ‘affordability’, that is certainly not going to help,” Cinquegrana said.
