Greek bonds declined, pushing 10-year yields to the highest in seven weeks, as opinion polls before next weekend’s European Parliament elections suggest Greece’s governing coalition is losing support.
Italian bonds fell, with yields rising the most in two months having earlier dropped to a record. Irish and Spanish securities also reversed gains that had pushed yields to the least since Bloomberg began collecting the data.
“Risks in Greece are still largely underestimated” so the selloff in bonds could continue, said Gianluca Ziglio, executive director of fixed-income research at Sunrise Brokers LLP in London. If the outcome of the European Parliament elections “has an impact on the next steps for debt sustainability then it could also spill over to other markets in the periphery.”
Greek 10-year yields rose 47 basis points, or 0.47 percentage point, to 6.77 percent at 1:55 p.m. London time after climbing to 6.85 percent, the highest level since March 28. The 2 percent bond maturing in February 2024 dropped 2.835, or 28.35 euros per 1,000-euro ($1,367) face amount, to 75.56. [Bloomberg]