All it took was a glimmer of optimism over Greece’s debt negotiations for the country’s bonds to jump on Wednesday, pushing 3- and 10-year yields down from the highest levels since 2012.
Speaking to reporters in Athens late on Tuesday, Greece’s Finance Minister Yanis Varoufakis said the “convergence is absolutely clear.”
That was sufficient to rekindle demand for higher-yielding euro-area bonds after a sell-off last week.
“Just the absence of a further escalation in the situation is enough to trigger a consolidation” after recent declines, said Michael Leister, a senior rates strategist at Commerzbank AG in Frankfurt, as Spanish 10-year yields fell 8 basis points.
Greece’s 3-year yield fell 196 bps to 27.62 percent, after earlier climbing to 30.05 percent, the most since the nation’s debt was restructured in March 2012.
The 10-year yield dropped 79 bps to 12.85 percent.