Greek 10-year bond yields dropped to a record 5.57 percent on Wednesday, breaking the previous record of 5.58 percent, set on June 10.
The development is in line with the wider climate that has prevailed in European markets since ECB President Mario Draghi said on Friday that the bank was prepared to respond with all available tools if eurozone inflation drops further.
Investors took this to mean the ECB may start an asset purchase program or other stimulus measures.
The German 10-year yield fell to 0.94 percent, resulting in a 4.63 percent spread between the two bonds.
Greece’s five-year yield followed a similar course, dropping to 3.88 percent, its lowest level since it was issued.
“There is a sympathy uptrade as Europe continues to rally, geopolitical concerns are still out there and there is no data to speak of,” said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.
“It’s pretty straightforward: More and more investors are expecting something big to be announced at the beginning of September,” said Felix Herrmann, an analyst at DZ Bank AG in Frankfurt. “At the moment they are just continuing the hunt for yield.” [Combined reports]