* Euro set for best week in 18 months
* Brent set to rack up third weekly price drop
* Greek yields fall after Athens' assurances
By John Geddie
LONDON, March 20 (Reuters) - The euro nudged towards its best week in 18 months while yields on low-rated bonds fell as investors welcomed the Fed's cautious approach to raising interest rates and a reform pledge from Athens that could avert a cash crunch.
Illustrating the problems low inflation is causing for
central banks looking to normalise monetary policy in the likes
of the United States and Britain, oil was set to rack up its
third weekly price slump.
Stocks flat-lined, but euro zone bond yields dipped after
assurances from Athens that it will submit reforms needed to
unlock bailout cash. Focus also drifted back to the European
Central Bank's trillion euro asset purchase scheme.
"The outlook for European markets is better than it has been for years, and the risks now are largely political," said Christian Schultz, senior economist at Berenberg.
Greek bond yields opened 18 basis points lower at 12.10
percent, while Portuguese, Spanish and Italian equivalents were
all down around 1-2 bps. German bonds - the euro zone benchmark
- were flat at 0.19 percent, just above a record low.
The euro was 0.2 percent higher against the dollar at
"What's been dominating the euro over the course of the last week has been the moves in the dollar. The FOMC announcement was, on margin, more dovish than expected," said Phyllis Papadavid, senior global FX strategist at BNP Paribas in London.
The pan-European FTSEurofirst 300 share index was flat at 1.597.27 points, having hit a new 7-1/2 year high just after markets opened.
The impetus from Wednesday's dovish statement from the U.S.
Federal Reserve started to ease, but Europe was bolstered by
gains in the construction sector after Holcim
Asian stocks were also broadly unchanged MSCI's broadest
index of Asia-Pacific shares outside Japan
The region's decliners included shares in Hong Kong, Malaysia, South Korea and Thailand. Australian and Chinese stocks were among the gainers in a choppy session.
"There are some signs the rally had got overheated. So the market is in a correction phase," said Masahiro Ayukai, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
The dollar was little changed against the Japanese yen at
The dollar index was down 0.3 percent at 98.96
In commodities, Brent crude oil was down 0.7 percent at
$54.04 a barrel
U.S. crude was down around 1 percent, a shade above the
six-year low of $42.03 a barrel hit earlier in the week.
(Editing by Toby Chopra)((To read Reuters Global Investing Blog click on
Keywords: MARKETS GLOBAL/