Friday October 31, 2014 Search
Weather | Athens
18o C
13o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Peripheral eurozone bond yields rise further as EU elections loom

Portuguese bond yields touched a two-month high on Wednesday as a sell-off in lower-rated eurozone bonds deepened amid concern that European Union elections this week might derail economic reforms.

Weaker global equities also soured appetite for riskier assets, prompting some investors to book profits from a two-year peripheral eurozone bond rally that has driven weaker states' borrowing costs to historic lows.

The rally hit the brakes after a strong showing by Greece's anti-austerity Syriza party during local elections at the weekend, underscoring the potential that Eurosceptic parties might do well in EU polls starting on Thursday.

That could cause unstable coalitions to change course to regain popular support and reawaken fears about debts and budget deficits. Greece, where the ruling parties have the smallest majority, is seen as the biggest risk.

"We have seen since last Thursday some corrective action in these markets ahead of the EU elections. This can go further,» said Matthias van der Jeugt, a strategist at KBC.

"We set absolute lows (in bond yields) during the rally that has been going since summer 2012 so some correction was eventually due.»

Portuguese 10-year bond yields rose as much as 12 basis points to 4.14 percent, the highest since March, according to Reuters data. They have risen almost 70 bps in the past week from an 8-1/2-year low of 3.43 percent hit a week ago.

Italian equivalents rose to their highest in nearly two months before retreating slightly with investor focus also on a debt swap in Rome aimed at smoothing the country's debt repayments. Spanish yields rose to levels last seen early last month of 3.17 percent.

Traders say investors were also overloaded with peripheral debt after buying 5 billion euros of Spanish inflation-linked bonds and 14.25 billion of Italian debt last week and were scaling back positions before more bond sales this week.

Spain plans to sell up to 3.5 billion euros of bonds on Thursday. Italy is offering up to 2.5 billion of five-year bonds in exchange for some 2015 and 2017 bonds.

Many in the market expect a resumption of the peripheral bond rally once the EU elections are out of the way, given expectations that the European Central Bank will inject more monetary stimulus next month.

"We have not changed our view in that our target for 10y BTP/Bund spread is still 100 basis points, however it seems investors will seemingly need to be patient for a market reversal,» RBS strategists said in a note.

Italy's 10-year bond yield premium over German Bunds was around 192 bps on Wednesday, its highest in nearly three months. [Reuters]

ekathimerini.com , Wednesday May 21, 2014 (15:40)  
Eurozone inflation up, unemployment steady, Eurostat reports
Greek retail sales rise for third month in a row
Germany’s 10-year bonds decline before euro-area inflation data
Cyprus’s Georgiades bets on economy for Irish-style bailout exit
Cyprus court ruling opens way for bailout funds
The Cypriot supreme court ruled as unconstitutional Friday four bills on bank foreclosures whose passage by parliament prompted international lenders to halt payments on the country’s 10-bil...
Greek PM appoints new defense, development ministers [Update]
Greek Prime Minister Antonis Samaras named his development minister to the defence ministry portfolio on Friday to replace Dimitris Avramopoulos, who is set to become an EU Commissioner. Nik...
Inside News
BASKETBALL
Obradovic watches Greens thrash his Fenerbahce
The second homecoming of former Panathinaikos coach Zeljko Obradovic, now at Fenerbahce, was not as emotional as last year’s, but it was certainly was the night of an emphatic triumph for th...
SOCCER
Berg returns to add spice to Panathinaikos´s Cup win
The second round of games for the group stage of the Greek Cup produced plenty of interesting games and results in midweek, but it still lags the upset potential that the knock-out stages of...
Inside Sports
COMMENTARY
The judiciary’s responsibility
The reform efforts over the past few years have begun to bear fruit. Greece has improved its standing in the World Bank’s Doing Business rankings, rising 48 positions from 2010 to 61st place...
EDITORIAL
Findings raise eyebrows
An investigation into money transferred to foreign banks by civil servants since 2010, when Greece’s brutal debt crisis erupted, has come up with some striking findings. The checks, which we...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Cyprus court ruling opens way for bailout funds
2. Greek PM appoints new defense, development ministers [Update]
3. PSI victims protest in Athens, Thessaloniki
4. Archaeologists find underground vault in Amphipolis tomb
5. Eurozone inflation up, unemployment steady, Eurostat reports
6. Nikos Dendias appointed defense minister
more news
Today
This Week
1. Man shot dead, woman injured in Vathis square attack
2. Cyprus’s Georgiades bets on economy for Irish-style bailout exit
3. Germany’s 10-year bonds decline before euro-area inflation data
4. Greek retail sales rise for third month in a row
5. New defense minister to be appointed without reshuffle
6. Archaeologists find underground vault in Amphipolis tomb
Today
This Week
1. Austria’s creative bookkeeping beats Greece on secret debts
2. End of reason, end of humanity
3. Clean bill of health for Greek banks from stress tests
4. Samaras pledges action after flash floods in Athens
5. Eurobank, National Bank restructurings eliminate capital gap
6. Athens flood damage assessed, compensation payments to begin
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.