Greek two-year bond yields jumped about 2 percentage points to a one-month high on Monday as a leaked transcript detailing mooted IMF bailout negotiation tactics renewed worries about the country’s finances.
WikiLeaks published on Saturday what it said was the transcript of a March 19 conference call of three senior International Monetary Fund officials, discussing tactics to apply pressure on Greece, Germany and the European Union to reach a deal in April.
Greece’s two-year yields rose to a one-month high of 11.15 percent, while 10-year yields were up 28 basis points at just over 9 percent.
An inverted yield curve, when short-term rates are higher than longer-term ones, usually suggests heightened default fears.
“Markets are nervous that it could either delay progress on the subsequent reviews or lead to something more significant,” said Stuart Culverhouse, chief economist at distressed debt broker Exotix.
“I don’t think there is much of a risk of default in the very near term but clearly if it absents official financing then it becomes more of a concern.”