ECONOMY

Greek bonds rally due to variety of factors

Greek government bonds rallied on Friday as an election campaign in European paymaster Germany neared its end with little clarity about what it might mean for Greece’s future in the eurozone.

Funding gaps facing Athens and the risk Portugal may not return to markets when its bailout runs out next year will be among European policy challenges for Germany’s next government.

Greek yields fell to one-month lows after the Federal Reserve unexpectedly kept its monetary stimulus unchanged and thanks to the first quarterly drop in almost four years in Greece’s unemployment rate.

“Greek bonds are rallying because of a combination of things: first, the [lack of] Fed tapering; second, more good data; and only third, the absence of any nasties in the German election campaign,” said Gabriel Sterne, an economist at distressed debt brokerage Exotix.

Greek 10-year yields fell 23 basis points to 9.964 percent.

[Reuters]