European stocks were seen opening lower on Monday, as holders of credit default swaps on Greek debt look set to get billions of euros in compensation following the restructuring of the country's bonds.
The FTSE was seen opening 17 to 18 points lower, or as much as 0.3 percent, the DAX was expected to fall between 17 to 23 points and the CAC was expected to drop about 13 points, according to financial spreadbetters quoted by Reuters.
Greek Finance Minister Evangelos Venizelos told CNBC in an exclusive interview he was confident that the country could secure “universal participation” in the debt swap scheme – the largest sovereign debt restructuring in history – following the extension of its offer until March 23.
The triggering of collective action clauses—which force more investors to take part in the debt swap deal, which exchanges existing bonds for longer-maturity, lower-rate ones—prompted the International Association of Swaps and Derivatives (ISDA) to declare a credit event, or what’s widely viewed as a technical default. Venizelos said this was not a cause for concern.
“The credit event and triggering of the CDS (credit default swap) is something internal. This is a kind of dealing room between banks and financial entities. It’s not something important for us as a real economy,” he said.
Asian stocks fell as worries about China's slowdown weighed on sentiment. The euro was down, hitting a three-week low versus the dollar after last week's upbeat US nonfarm payrolls data suggested the Federal Reserve may hold off on more quantitative easing.
Oil and gold were also trading lower. A CNBC survey found oil pricesmay decline further.
Among economic data of interest, Italy gross domestic product data for the fourth quarter of last year will be released at 9 a.m. London time. February's long-term interest rates statistics for the European Union will also be released at 9 a.m.
Germany will auction 4 billion euros ($5.2 billion) in six-month Treasury bills at 10:30 a.m. London time and at 1:50 p.m., France will hold a weekly T-bill auction seeking to raise around 8 billion euros in short-term debt.
A regular meeting of euro zone finance ministers – the Eurogroup – takes place in Brussels on Monday and investors will watch to see their reactions to the Greek debt restructuring deal.