Lower-rated peripheral bonds inched up on Friday with niggling European Union election concerns curbing enthusiasm over the latest round of ratings upgrades.
Fitch lifted Greece’s rating for the second time in a year on Friday, while Standard and Poor’s followed through with a widely expected upgrade on Spain.
Prices in peripheral bonds have stabilized after a sharp sell-off, but with EU election results set to be released on Saturday and ahead of long weekends in the UK and the US, trading volumes were tipped to be fairly subdued yesterday.
In Greece, a strong showing by anti-bailout parties may hurt an already-fragile coalition, potentially paving the way to national elections.
“The periphery has rallied off their lows but I’m not sure how much more mileage there is left in it,” said Marc Ostwald, a strategist at Monument Securities.
Italian and Spanish 10-year yields opened two basis points lower at 3.03 and 3.22 percent respectively.
Greece was 1 bp down at 6.51 percent, while Portugal and Ireland were unchanged at 2.85 and 3.87 percent.