Thursday October 2, 2014 Search
Weather | Athens
28o C
16o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greek yields fall below 7 percent as crisis source regains confidence

By Lukanyo Mnyanda and Anchalee Worrachate

Greek 10-year yields fell below 7 percent for the first time since the nation’s initial financial bailout in 2010, as signs Europe is putting the debt crisis behind it boosted demand for the region’s assets.

Four years after threatening to splinter Europe’s monetary union, Greece’s surging bonds are a symbol of the region’s recovery that’s giving investors the confidence to search for higher returns than those offered on benchmark German debt. The drop in yields marks a turnaround for a country that was rescued by its neighbors as borrowing costs surged after it admitted having a bigger budget deficit than previously predicted. The euro climbed to the highest level this year versus the dollar.

“When investors look at the euro zone, they are no longer worried,” said Elwin De Groot, a markets economist at Rabobank in Utrecht, the Netherlands. Higher yields “can be found in the periphery more so than in the core countries” such as Germany, he said.

Greek 10-year bond yields fell 14 basis points, or 0.14 percentage point, to 6.88 percent at 11:22 a.m. London time, after declining to 6.76 percent, the least since May 2010. The yield has dropped 74 basis points this week. The 2 percent bond due in February 2024 rose 0.845, or 8.45 euros per 1,000-euro ($1,379) face amount, to 74.30.

The rate climbed to a record 44.2 percent in March 2012.

Greek bonds advanced even as a meeting with the country’s creditors this week ended without an agreement on how much extra capital the nation’s lenders need.

Irish Yields

Irish 10-year yields were about eight basis points from a record low and similar-maturity Portuguese bonds extended a weekly gain. Both Ireland and Portugal were recipients of international aid during Europe’s financial turmoil.

The rate on Ireland’s 10-year bonds was little changed at to 3.10 percent today, down nine basis points this week. The rate fell to 3.02 percent on Sept. 22, 2005, the least since the euro’s 1999 debut.

Portugal’s 10-year bond yield was at 4.82 percent, down 11 basis points since Feb. 21. The rate dropped to 4.78 percent yesterday, the least since June 2010.

Europe’s sovereign debt crisis broke out in 2009 after Greece’s newly elected socialist government said its budget deficit was twice as big as the previous administration had disclosed. The selloff in euro peripheral bonds accelerated, pushing up borrowing costs and threatening to break the monetary union.

Crisis Fading

Greek assets are now winning investors back as fixed- income, currency and derivatives markets show the crisis that gripped the euro area from 2009 is fading. With European Central Bank President Mario Draghi sticking by his pledge to backstop the region, investors are returning to Greek bonds, even after the nation’s financial trauma caused private bondholders to write off more than 100 billion euros in 2012.

The country has received two international bailouts, and its ratio of debt to gross domestic product will be about 177 percent this year, according to European Commission forecasts. It swapped existing securities for new bonds maturing between 2023 and 2042 as part of the world’s biggest sovereign-debt restructuring in 2012.

The euro climbed as much as 0.8 percent $1.3813, the highest level since Dec. 31.

Greek bonds have earned 17 percent this year, the best performer among 15 euro-area debt markets tracked by Bloomberg World Bond Indexes. Those of Portugal and Ireland returned 8.6 percent and 3.5 percent, while Germany’s gained 2.6 percent.

[Bloomberg]

ekathimerini.com , Friday February 28, 2014 (14:47)  
Attica Bank said to have rejected notable offers
PMI index slides anew in September
Costa Navarino to host big events
Construction of F1 circuit at Patra to start by year-end
Terror group link prompts police raids and arrests
Police found a Kalashnikov assault rifle, a handgun, a hand grenade and numerous bullets Wednesday while searching homes in Athens and Thessaloniki used by six people who were detained and a...
Samaras to seek confidence vote in bid to rally coalition
The government said on Wednesday that it will request a vote of confidence when Parliament reconvenes after the summer recess next week, seeking to douse speculation about early elections an...
Inside News
SOCCER
Rosenberg punishes Olympiakos´s errors at Malmoe
A disappointing Olympiakos got the worst possible result from its clash with Malmoe in Sweden for the Champions League, going down 2-0 on Wednesday due to its own defensive errors and attack...
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...
Inside Sports
COMMENTARY
Truth before the battle
The coalition has lost its sense of direction in the last few months. Exactly where things went off track is not the question at this stage. What is certain is that if it continues competing...
EDITORIAL
Bending the rules
The flexibility with which laws are implemented has been a fundamental cause for concern in Greece during the post-dictatorship era. Everything becomes a subject for negotiation, even in cas...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Rosenberg punishes Olympiakos´s errors at Malmoe
2. Terror group link prompts police raids and arrests
3. Samaras to seek confidence vote in bid to rally coalition
4. Attica Bank said to have rejected notable offers
5. PMI index slides anew in September
6. Costa Navarino to host big events
more news
Today
This Week
1. Air-raid sirens to go off all over Greece at 11 a.m. in drill
2. Mario Draghi to push ECB to buy Greek, Cypriot 'junk' loans: FT
3. Truth before the battle
4. Smallpox decimates sheep stocks in northern Greece
5. Thessaloniki transport gets more expensive
6. Bending the rules
Today
This Week
1. Greece may opt for unusual president to avoid snap polls, Venizelos says
2. Woman allegedly buried alive by accident in northern Greece
3. Salaries in Greece continue to slide, dipping 1.4 pct in Q2
4. Should you bet with Kissinger on where the world is heading?
5. Cypriots divided by 1974 war seek Shariah hub
6. The shocking thought of euro-dollar parity
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.