The bulls took over on Tuesday as the major stock exchange traded funds (ETFs) moved higher based on hopes for a new plan to deal with Greece’s debt crisis addressed some investor worry, but more grim economic data suggested there were more hurdles ahead.

Greece appears to have agreed on a tax cut with its international lenders, aimed at forging a broad consensus for more austerity to avoid a debt default, but the opposition said on Tuesday this would still not win its support. International lenders are demanding that leading Greek political parties sign up to the government’s latest austerity and reform drive to ensure that Greece keeps tackling its huge budget deficit for years to come, whoever is in power. In Berlin, a German coalition source said European Union, IMF and ECB inspectors had struck a deal with the Socialist government on a value-added tax cut. “They have agreed on it,” the source said, following Athens newspaper reports that the “troika” team, which is scrutinizing Greek finances, had backed a reduction in VAT rates. The SPDR Stoxx Europe 50 ETF (NYSEArca: FEU) closed over 3% on Tuesday.

Oil rose about 2% today as fresh hope that Europe could be moving closer to a solution to its sovereign-debt woes lifted the euro against the dollar, helping dollar-denominated commodities. Also, helping to push oil higher was a report of pipeline problems in the Midwest and “it’s higher mainly in response to a weaker dollar,” said Jim Ritterbusch of Ritterbusch and Associates in Illinois. Oil futures also benefited from news Libya’s Col. Moammar Gadhafi is under increased pressure as NATO steps up its bombing campaign against his military forces. Rebels “are said to have exhausted their stocks of crude oil, and a refinery in Tobruk has shutdown,” analysts at J.P. Morgan said in a report to clients Tuesday. Most of Libya’s oil had been exported to Europe and Libya’s product is of the harder-to-match light, sweet kind. The United State Oil Fund ETF (NYSEArca: USO) gained 2% today.

The dollar lost ground against the euro after a report eased investors’ fears about Greece’s debt woes. But both currencies gained on the yen after Moody’s Investors Service said it was reviewing Japan’s rating for a possible downgrade. The dollar index, which measures the U.S. unit against a basket of six major currencies, slipped to 74.644 from 74.941 in Asian trading Monday. The euro pared its gains after weak U.S. confidence data weighed on equities, reducing investors’ willingness to move away from the relative safety of the greenback into other currencies and riskier asset classes. The PowerShares DB U.S. Dollar Index Bearish ETF (NYSEArca: UDN) was up moderately in today’s trading.

Treasury prices rose on Tuesday and pushed yields back to their lowest level in six months, after a report showing unexpected weakening in consumer confidence in May, adding to worries about the economy’s growth potential. Yields on 10-year notes, which move inversely to prices, fell 3 basis points to 3.05%, after rising as high as 3.11%. The yields touched 3.04%, their lowest level since early December. “It is clear that U.S. growth concerns continue to hold rates at low levels,” said Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities. The iShares Barclays 20+ Year Treasury Bond ETF (NYSEArca: TLT) had a small gain today.

Gregory A. Clay contributed to this article

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.