ECONOMY

Greek 10-year yields shoot up amid EU skepticism over bailout exit

Greece’s government bonds declined, pushing 10-year yields to the highest since May, after euro-area finance ministers clashed with the nation’s leaders over their desire to sever a bailout program.

The drop pushed the 10-year yield up for a second day. Ministers are watching “with a certain skepticism and concern,” Austrian Finance Minister Hans Joerg Schelling said yesterday. The euro area’s second-biggest bond rally this year is slowing amid concern Greece won’t be able to raise finance at sustainable rates without the support of its regional partners. German 10-year yields were four basis points from a record low.

Greek 10-year yields rose 22 basis points, or 0.22 percentage point, to 6.92 percent at 9:20 a.m. London time, having reached 6.93 percent, the most since May 16. The 2 percent bond maturing February 2024 fell 1.275, or 12.75 euros per 1,000-euro ($1,270) face amount, to 75.940.

Greece’s government securities returned 19 percent this year through yesterday, Bloomberg World Bond Indexes show, trailing behind only Portugal’s 20 percent. Germany’s earned 7.5 percent while Italy’s made 13 percent.

[Bloomberg]