Tuesday September 2, 2014 Search
Weather | Athens
29o C
23o 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)  
Tourism targets rise ever higher
Horse race betting hurdle removed for OPAP
Revised GDP data confirm that Greek growth is near
Measures to reduce unemployment
Education minister calls for probe into predecessors reform plan
Following reports that a plan to reform the tertiary education sector launched in the spring of 2013 failed to lead to millions of euros in savings, Education Minister Andreas Loverdos on Mo...
Anti-racism bill goes back to Parliament
An anti-racism bill, foreseeing stiffer penalties for individuals and political parties that engage in racism or incite racist violence, is to be debated in Parliament on Tuesday following m...
Inside News
BASKETBALL
Greek hoopsters go top of their group in World Cup
Greece has qualified to the second round of the FIBA World Cup after going top of its group of six through a third win in as many group games in Spain. On Monday it beat Puerto Rico 90-79 in...
SOCCER
Fulham striker Mitroglou set to re-join Olympiakos
Greek champions Olympiakos Piraeus are set to re-sign Kostas Mitroglou on loan from English second tier club Fulham after the striker arrived in Athens for talks on Sunday. An Olympiakos spo...
Inside Sports
ANALYSIS
EUs three big problems all linked
The outgoing president of the European Council, Herman Van Rompuy, said at the weekend that his successor, Donald Tusk, currently Polands prime minister, faces three big challenges: the sta...
COMMENTARY
A great president
I fully understand the countrys need for political stability, a necessity which makes the election of a president by the current Parliament absolutely imperative. At the same time, however,...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Greek hoopsters go top of their group in World Cup
2. Tourism targets rise ever higher
3. Horse race betting hurdle removed for OPAP
4. Revised GDP data confirm that Greek growth is near
5. Measures to reduce unemployment
6. Peachy export data despite Russian embargo
more news
Today
This Week
1. Excavation work at Amphipolis reveals section of marble mosaic floor
2. A great president
3. Erdogan visits Turkish-occupied Cyprus
4. Greek economy shrinks at slowest pace since late 2008
5. Dont feed the zombies
6. Greek officials meet to fine tune strategy for Paris talks with troika
Today
This Week
1. Thessaloniki mayor Boutaris sworn in wearing yellow star amid Golden Dawn protests
2. The battle against progress
3. Attack on gay couple in Athens leaves one man needing surgery
4. Strong undersea quake occurs off island of Milos, felt in Athens
5. Greek quest for debt relief faces hurdles in Paris
6. Hardouvelis, ECB executive discuss bank program, stress tests
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.