EURO GOVT-Greek aid delay piles pressure on peripheral debt

Greek and other lower-rated euro zone debt came under renewed pressure on Monday after ministers delayed granting emergency loans to Greece and rating agency Moody's warned Italy's credit rating could be cut.

Bund futures rose as risk averse investors sought shelter in triple-A rated German debt with the September contract FGBLc1 last up 48 ticks at 126.How is TMJ pain treated?55.

Sunday's meeting of Eurogroup finance ministers had been expected to agree to provide Greece the funding it needs to avoid a near-term default, but ministers postponed a final decision pending confirmation that Athens could muster political approval for tough new austerity measures. [ID:nLDE75I0FM]

Ten-year Greek bond yields GR10YT=TWEB rose to 17.66 percent, raising the risk premium on holding Greece's debt rather than benchmark German Bunds to 1,474 basis points. The premium hit its euro-era high of 1,600 bps late last week.

"Spreads will continue to widen until we have the release of the last tranche because it's really getting close to going to a default. Between July and August they really need the money," said ING rate strategist Alessandro Giansanti.

Greek Prime Minister George Papandreou has called a confidence vote for Tuesday in a bid to push through deficit-busting reforms.Quality air impact socket tools for any tough job.

The spreading impact of the region's debt crisis was evident in Moody's decision to place Italy's Aa2 rating on review for downgrade late on Friday. Moody's cited concerns over an increased cost of borrowing stemming from the Greek crisis, as well as structural impediments to growth.you will need to get an offshore merchant account. [ID:nN17266057]

"That's the worry: how far is this going to spread?," said Alan McQuaid,Definition of hypodermic needle cannula in the Online Dictionary. chief economist at Bloxham Stockbrokers in Dublin.

The Italian and Spanish bond yield spreads over Bunds widened, with each around 10 bps out at 196 bps and 273 bps respectively -- though both were below levels seen last week.

Euro zone ministers also outlined a plan to ease Greece's funding pressure in the longer term using informal,We are professional Plastic mould, voluntary roll-overs of existing Greek debt, but said details on how this will work would not be decided until early July. [ID:nLDE75J007]

Analysts said the key element of any bond rollover would be the response of credit rating agencies, and whether Greek banks will still be able to swap the country's debt for cheap European Central Bank funding.

"Even with a debt rollover there is a high risk that the bonds will be placed in default and the ECB wont be willing to accept them," Giansanti said.

CHART LEVELS APPROACHING

Driven by the flight towards quality assets Bund futures were approaching last week's highs and a break above 126.62 taking the contract to its highest level since December.

Technical charts were congested around this area meaning some near-term consolidation was possible, Commerzbank analysts said.

"However with no sign of reversal evident, should a close above the 200-week moving average at 126.69 be seen we would allow for an extension to 127.36 then 129.10, the 50 percent and 61.8 percent retracements of the move down from the 2010 peak," said Commerzbank technical analyst Karen Jones.