US Markets

The U.S. dollar was modestly lower in holiday-thinned trade Monday as the euro brushed aside concerns triggered by Standard & Poor's warning on Greece's debt. Standard & Poor's warning that a debt rollover plan for Greece would be akin to a default rattled markets and negated the positive momentum seen after euro-zone ministers approved funding for Greece this past weekend.

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Late Monday in Canada, the euro was at $1.4541 from $1.4528 late Friday, according to EBS via CQG. The dollar was at Y80.77 from Y80.86, while the euro was at Y117.47 from Y117.45. The U.K. pound was at $1.6090 from $1.6067. The dollar was unchanged at CHF0.8475. The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 74.254 from about 74.298. The tone of the market was broadly more positive toward risky assets, but some market participants said the swing of optimism last week that was sparked by Greece's agreement to austerity measures will probably fade away, with the markets more likely to look intently at economic data coming out of China and the U.S. this week.

The U.S. faces an unresolved debt-ceiling issue. The White House and congressional leaders are working to strike a deal that slashes budget deficits and raises the $14.29 trillion federal debt ceiling before Aug. 2, when the Treasury Department says the U.S. will default if Congress doesn't raise the legal limit.

European Markets

European stock markets ended higher Monday, buoyed by gains for the likes of drug giant Bayer AG and electric utility RWE AG, while most banking stocks declined. The Stoxx Europe 600 index rose 0.2% to close at 275.54 in a subdued trading session as U.S. markets remained closed for the Fourth of July holiday.

Bank stocks fell, with Credit Agricole posting a 1.3% decline, while Lloyds Banking Group PLC lost 1.8% and Deutsche Bank AG fell 0.7%. The falls came after Standard & Poor's Ratings Services said proposals put forward by French banks to roll over some of their Greek debt would likely be considered a default under the rating agency's criteria. One of the few lenders to buck the downward trend Monday was Italy's Banca Monte dei Paschi di Siena SpA, which rallied 5.1% after Societe Generale upgraded the stock to buy from hold, citing its cheap valuation and growth prospects.

Outside the banking sector, German chemical and pharmaceutical group Bayer rose 1.4% after the U.S. Food & Drug Administration late Friday approved an anti-clotting drug the company jointly developed with Johnson & Johnson. Shares in utility RWE AG rose 0.8% after a report in the Sunday Times newspaper that the group may sell its U.K. npower arm for around GBP5 billion in a move to help reduce debt. The German DAX 30 index gained 0.3% to 7,442.96.

The French CAC 40 index fell 0.1% to end at 4,003.11, driven by losses for the banking sector. In the U.K., the FTSE 100 index finished 0.5% higher at 6,017.54. John Wood Group PLC was among the top performers, rising 3.4% as the engineering group extended last week's strong run.

Asian Markets

Asian stocks rode higher Monday as upbeat U.S. manufacturing data and a further easing of concerns over Greece pushed investors to prolong last week's relief rally, with exporters and financial shares driving the gains. Thai stocks were the day's best performer, gaining on hopes that the decisive election victory Sunday for a party headed by former Prime Minister Thaksin Shinawatra's sister, Yingluck Shinawatra, would spur consumption and investment.

In Bangkok, the benchmark SET Index jumped 4.7%. Leading the advance, Bangkok Bank jumped 5.4%, PTT Aromatics & Refining rose 5.3% and Total Access Communication soared 8.2% ahead. Elsewhere in Asia, Hong Kong's Hang Seng Index ended 1.7% higher at 22770.47 and China's Shanghai Composite Index added 1.9% to 2812.82. South Korea's Kospi gained 0.9% to 2145.30 and Taiwan's Taiex rose 0.4% to 8774.72.

Japan's Nikkei Stock Average ended the day 1% higher at 9965.09 having briefly scaled the 10,000 level during the session with some analysts citing optimism over the nation's economic recovery from the brunt of the March 11 natural disasters. Several automobile and technology exporters raced ahead during the session. Among Tokyo-listed car makers, Honda Motor climbed 3.5%, and Toyota Motor gained 1.5%, while in Seoul, Kia Motors advanced 1.2%. Among technology firms, Samsung Electronics soared 2.7% in Seoul, Lenovo Group gained 4.5% in Hong Kong, Nanya Technology jumped 6.9% in Taipei and Advantest gained 1.6% in Tokyo.

Base Metals

Copper on the London Metal Exchange closed higher for a fifth day Monday as better demand for risk assets and an improved technical picture lifted most base metal prices. Three-month copper on the LME closed afternoon outcry trading at $9,455 a metric ton, up $10 on Friday's close but off an earlier high of $9,520.25/ton. The euro supported the rise in the dollar-denominated metals as it stabilized against the greenback in quiet trade, with U.S. markets closed for Independence Day.

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