By Justin Carrigan April 12 (Bloomberg) -- The euro strengthened for a third day against the dollar and the cost of insuring against a default by Greece dropped by the most on record after the nation got an international aid pledge. Treasuries and bunds fell. The euro appreciated versus all but one of its 16 most- traded counterparts at 7:16 a.m. in New York. The cost of insuring Greek bonds against default tumbled 78 basis points to 348, according to CMA DataVision prices for credit-default swaps. The MSCI World Index of 23 developed nations’ stocks rose 0.3 percent. Futures on the Standard & Poor’s 500 Index were little changed. Greece got a promise of as much as 45 billion euros ($61 billion) in loans yesterday from the euro-region and International Monetary Fund to help cover its financing needs and avoid a default. The agreement may remove a concern that helped drive the euro 4.8 percent lower against the dollar this year even as signs emerged that global economic growth is accelerating. The Bank of Korea said today its economy will expand 5.2 percent this year, the fastest pace since 2006. “Markets have very much been determined by the news out of Greece over the weekend,” said Sean Maloney, a fixed-income strategist at Nomura International Plc in London. “The overall level of risk has come down. We’re looking at a better scenario than we were last Friday.” The euro rose as high as $1.3692, its strongest level in more than three weeks. The Dollar Index, which tracks the U.S. currency against those of six major trading partners, fell as much a 1.3 percent, the most in a month. Greek Bonds Gain Greek bonds jumped, with the yield on the benchmark two- year note tumbling 129 basis points to 5.87 percent, the biggest decline since the euro was introduced in 1999. The yield premium, or spread, investors demand to hold the government 10- year debt instead of similar-maturity German securities, the benchmark bonds for the region, narrowed by 64 basis points. Greece’s bailout spurred gains in eastern European markets, with Poland’s WIG20 Index of shares climbing 0.5 percent and the zloty erasing earlier losses to trade unchanged against the euro, even after the weekend plane crash that killed Poland’s president and central bank chief. Hungary’s forint climbed the most in a month, gaining 0.6 percent against the euro, and the benchmark BUX stock index rose 0.5 percent after Fidesz, the largest opposition party, scored a landslide victory in yesterday’s parliamentary election. The MSCI Emerging Markets Index fell 0.1 percent, led by a 4.4 percent slump in Thailand’s main index after a clash between soldiers and protesters left as many as 21 people dead. Treasuries Drop German government bonds and U.S. Treasuries declined as the agreement to lend to Greece at below-market interest rates reduced the appeal of the securities as a haven. The 10-year bund yield rose 2 basis points to 3.19 percent after earlier climbing as high as 3.22 percent, the most since Feb. 23, according to data compiled by Bloomberg. The 10-year Treasury yield also added 2 basis points, to 3.90 percent. Three shares rose for every two that fell on the Stoxx Europe 600 Index. Greece’s ASE Index surged 4.4 percent, the most in two months, led by National Bank of Greece SA, the nation’s biggest lender, which rallied 7.6 percent in Athens. UBS AG, Switzerland’s largest bank, surged 3.6 percent in Zurich after reporting the highest quarterly earnings in almost three years. Basic Resources Gains in Europe were limited as basic resources shares fell. Xstrata Plc, the biggest exporter of power station coal, slipped 1.7 percent in London after the Australian newspaper reported the company may bid A$4 billion ($3.7 billion) for Macarthur Coal Ltd. Antofagasta Plc, which will produce almost 10 percent of Chile’s copper this year, slipped 1 percent after analysts at Exane BNP Paribas and Citigroup Inc. downgraded the shares. The MSCI Asia Pacific Index advanced less than 0.1 percent. Billabong International Ltd., which gets almost a quarter of its revenue in Europe, increased 2.6 percent in Sydney. Nintendo Co., which receives about 34 percent of revenue from Europe, jumped 4.5 percent in Osaka as the euro strengthened against the yen. U.S. futures indicated the S&P 500 may hold close to its highest level since September 2008. Alcoa Inc., the largest U.S. aluminum producer, kicks off the first-quarter earnings season after the close today. Combined profit for S&P 500 companies will increase 30 percent from a year earlier, according to analyst estimates compiled by Bloomberg. Intel Corp., JPMorgan Chase & Co., Bank of America and General Electric Co. also post results this week. The cost of insuring Portuguese debt fell 13 to 145 basis points as investors bet the Greek rescue package will reduce the risk of defaults elsewhere in Europe. Spanish credit-default swaps were 8 lower at 118 basis points. Swaps on Italy declined 6 to 117 basis points. Crude oil for May delivery advanced 0.6 percent to $85.44 a barrel on the New York Mercantile Exchange. Copper for delivery in three months gained 0.5 percent to $7,966.50 a metric ton on the London Metal Exchange.

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