Tuesday September 30, 2014 Search
Weather | Athens
26o C
17o 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)  
NBG Pangaea eyes listing on foreign bourse, huge portfolio
Out-of-control unpaid bills bring PPC to its knees
Banks feel optimistic ahead of stress test results
S&P upgrades OTEs credit rating and revises outlook
Would-be commissioner Avramopoulos sets out priorities on migration
Dimitris Avramopoulos, the EU commissioner-designate for migration and home affairs, on Tuesday sought to set out his priorities for a post regarded as more crucial than ever amid increasing...
Money ring sent4.5 mln abroad
Two Afghan employees at a currency exchange bureau in central Athens and a Greek alleged to own the establishment were detained on Tuesday in connection to the alleged illegal transfer of mo...
Inside News
SOCCER
All team sports suspended next weekend in memory of dead fan
The government announced on Monday the suspension of all team sports events in Greece scheduled for next weekend, October 4 and 5, in the memory of the Ethnikos Piraeus fan who died a few ho...
SOCCER
Karamanos punishes Michel for deeming him surplus
Atromitos forced Olympiakoss first loss this season in all competitions on Saturday to allow PAOK to go alone on top of the Super League table on Sunday. Odds-on title favorite Olympiakos l...
Inside Sports
COMMENTARY
Next-day jitters
It is usual for Greek governments, whether one-party or coalitions (which are normally loath to actually work together), to claim that their only real challenge is dealing with the countrys...
EDITORIAL
No sweet debt deals
The lions share of Greeces debt is held by European Union member states and the International Monetary Fund. A writedown of the European part of the debt would require the approval of the ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. NBG Pangaea eyes listing on foreign bourse, huge portfolio
2. Out-of-control unpaid bills bring PPC to its knees
3. Banks feel optimistic ahead of stress test results
4. S&P upgrades OTEs credit rating and revises outlook
5. Athens tourism fuels hotel occupancy
6. Would-be commissioner Avramopoulos sets out priorities on migration
more news
Today
This Week
1. Next-day jitters
2. Roma camp off Mesogeion Avenue set for demolition amid reactions
3. No sweet debt deals
4. Commissioner-designate Avramopoulos to face three-hour interview on EU's migration portfolio
5. Greek unemployment dips to 27 pct in June, but still highest in EU
6. Roma camp evacuation postponed; flow resumes on Mesogeion Avenue
Today
This Week
1. Alexander the Great's tomb not at Amphipolis, says Culture Minister
2. Greece may opt for unusual president to avoid snap polls, Venizelos says
3. Woman allegedly buried alive by accident in northern Greece
4. Salaries in Greece continue to slide, dipping 1.4 pct in Q2
5. Venizelos denies jihadis are being trained in Greece
6. Should you bet with Kissinger on where the world is heading?
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.