World stocks improved slightly in trading thinned by holidays in China and the United States. But concerns were also intensifying over the debt restructuring of state-owned conglomerate Dubai World, which pushed the cost of insuring Dubai sovereign debt against default 11-month highs. The European Commission said it could call on Greece to take additional measures to reduce its budget deficit but that it was waiting for a mid-March evaluation of the government's action.

"The market will be looking for any confirmation of support (from the finmins) for the Greek authorities, but it looks like Germany in particular will be asking for more fiscal measures before they're prepared to provide that," said Nick Stamenkovic, rate strategist at RIA Capital Markets. "So that might stall the recent improvement in Greek spreads." The premium investors demand to buy 10-year government bonds in Portugal and Ireland — other highly indebted euro countries — rather than German benchmarks rose.

Greek markets are shut for a holiday but five-year credit default swaps — measuring the cost of insuring sovereign debt against default — stood at around 352 basis points on Friday. Commerzbank said CDS pointed to a default probability of 21 per cent. European Union leaders said last week the euro zone would take determined and co-ordinated action to safeguard financial stability, a vague pledge which disappointed investors. The euro held steady at $1.3620, having fallen as low as $1.3529 on Friday. — Reuters