Greek government bond yields fell sharply on Monday and further declines were seen as Athens secured its next tranche of bailout aid.
Greek paper outperformed other lower-rated eurozone bonds, yields on which also fell after European Central Bank President Mario Draghi (photo) repeated last week’s pledge to keep interest rates low or even cut them.
But analysts said the market was likely to be choppy for some time due to diverging eurozone and US rate outlooks.
“The market was expecting for [a decision on Greece] to get through somehow with all the usual noise but there’s no big-type event risk,” said David Schnautz, strategist at Commerzbank in New York.
“Overall there should be scope for the [Greek] 2023 bond to at least test the 10 percent level again in yield terms but going back to the trough of May 22 is a stretch,” Schnautz added.
Ten-year Greek yields fell 43 basis points to 10.98 percent yesterday.