Greek budget news a big market mover

Reuters broke the news on March 3 that the Greek government had approved new austerity measures worth 4.8 billion euros for 2010, including higher value-added tax and cuts in public service salaries. The news, which was the biggest development in the euro zone debt crisis for several weeks, triggered a sharp narrowing of Greek bond spreads, a drop in Greek credit default swaps, and a rise of the euro. The Reuters alerts landed on clients’ screens 24 minutes before Bloomberg reported the news, by which time the euro had gained about half a cent against the dollar. Dow Jones was about 15 minutes behind. A week later, Athens again broke news on the progress Greece was making on its deficit cutting plans in a report that sent the spread between 10-year Greek bonds and German bunds wider by 4 basis points. The report revealed the Greek economy will shrink by more than expected in 2010 and pay more for interest rates. The story was also picked up by several local and international financial websites: Bloomberg came in about four hours later and Dow Jones had a story seven hours after Reuters.