US stock futures down, euro firms as Greek deal gets cautious nod

US stock futures edged lower on Tuesday and the euro firmed as investors cautiously waited to see if Greece's conditional bailout agreement would bring to an end that country's debt crisis. 

PHOTO: REUTERS

JUL 14, 20158:06 AM

[TOKYO] US stock futures edged lower on Tuesday and the euro firmed as investors cautiously waited to see if Greece's conditional bailout agreement would bring to an end that country's debt crisis.

The terms imposed by Athens' international lenders led by Germany in all-night talks at an emergency summit obliged Greece's leftwing Prime Minister Alexis Tsipras to abandon his pledge to end austerity.

Mr Tsipras will face a showdown with members of his own party later on Tuesday, over the agreement under which Greece can get a possible 86 billion euros (S$129 billion) over three years if it can satisfy its European partners that it is meeting their conditions.

US stock futures edged lower, with S&P 500 mini futures down about 0.1 per cent from late US levels, after Wall Street jumped on hopes for the Greece deal. All three major stock indexes ended up more than 1 per cent, in what some strategists described as a relief rally.

But some said doubts would remain until the proposal is actually accepted. "Investors did not like that a Grexit is still on the table if Parliament votes no," managing director at BK Asset Management, said in a note to clients. "The risk is far less now than a week ago but the fact that it is not eliminated puts pressure on the euro." The euro last traded at US$1.1000, nearly flat on the day. Against the yen, it inched up 0.1 per cent to 135.88 yen.

The greenback was buying 123.53 yen, up about 0.1 per cent.

In commodities trading, US crude slipped about 0.8 per cent to US$51.78 a barrel, pressured by reports that Iran was close to a deal with six world powers that would allow it to sell its oil again on the oversupplied world market.

Iran's Foreign minister and EU's foreign policy chief will read a joint statement in a few hours at the end of marathon talks between Iran and six major powers, the Students News Agency ISNA reported on Tuesday.

A draft nuclear deal between Iran and six major powers calls for UN inspectors to have access to all suspect Iranian sites, including military, based on consultations between the powers and Tehran, a diplomatic source said on Tuesday.

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