(Reuters) - Global equities edged higher and the euro rose on Friday as Greece readied new austerity measures to secure a multi-billion-euro aid package that could be announced in coming days, but caution reined in gains.
Shares were also supported by strong earnings reports from major U.S. companies, which bolstered hopes the world's largest economy was picking up steam, tempering worries about weakness in Europe.
Markets will look to first quarter U.S. gross domestic product data due out at 1230 GMT, which is expected to show a 3.4 percent annualized gain.
World stocks measured by the MSCI All-Country World Index .MIWD00000PUS rose 0.2 percent at 310.16 by midday European trade, off from the day's high of 310.86.
U.S. stock price futures pared gains to trade flat, after Wall Street rose some 1 percent overnight.
"The next week is really a very decisive week for the euro zone as well as for Europe as a whole," said Tammo Greetfeld, equity strategist at UniCredit in Munich.
"Here, there is some uncertainty as the crisis itself will not be over once the money is paid to Greece".
Sources familiar with the Greece aid talks said officials were expected to announce details of the aid package by Monday, but investors were cautious, awaiting details on the plan as well as the reaction in Athens, where angry unions are readying strikes to protest against severe austerity measures.
An European Commission spokesman said the talks could finish by Saturday.
Greece is set to cut its budget deficit by 10 percentage points this year and next. Planned aid from the European Union and the International Monetary Fund could balloon to 120 billion euros over three years, up from an original plan of 45 billion euros this year.
Concerns about credit risk eased somewhat as the spread between Greek and German 10-year government bond yields narrowed.
EURO GAINS
The euro was 0.7 percent higher on the day at $1.3320 as hopes for a quick Greek rescue package spurred investors to cover short positions.
But the euro was still off from the week's high of $1.3415 and on track to fall nearly 1.5 percent for the month on concerns whether Greece's problems would really be laid to rest.
"The euro's being helped up on month-end fixing and there's also some position squaring on euro shorts ahead of the long weekend in the UK," said RBS currency strategist Paul Robson.
Financial markets in London are closed on Monday. Tokyo markets will be shut Monday through Wednesday, for the so-called Golden Week holidays.
Ulrich Leuchtmann, currency analyst at Commerzbank in Frankfurt, said: "If the conditions of the (Greek) aid are well received and the amount offered is sufficient the euro could rise, but any gains will likely be short-lived".
"But once those risks are off the table ... it will depend on whether Greece is able to make good on its promises to implement the terms," he added.
The yen fell against the dollar after the Bank of Japan left interest rates unchanged as expected.
The bank unexpectedly released a statement saying members agreed the central bank needed to make new efforts to bolster the economy, though BoJ Governor Masaaki Shirakawa said there was no need for further monetary easing now. U.S. crude oil futures rose 45 cents to $85.62 a barrel by 1030 GMT, not far below an 18-month high of $87.09 hit on April 6. April is set to be the first month since September 2008 when the front-month contract has traded continuously above $80 a barrel.
Gold prices reached their highest level this year above $1,170 an ounce.
Additional reporting by Harpreet Bhal, Neal Armstrong and Naomi Tajitsu; editing by Ian Jones
Reuters
