Greek two-year government bond yields dropped around 250 basis points on Monday after Athens reshuffled its team handling talks with European lenders and the International Monetary Fund.
The reshuffle suggested Finance Minister Yanis Varoufakis, a brash and outspoken economist who was isolated at a Eurogroup meeting in Riga last week, will take a less prominent role in talks.
The Greek government reiterated though that Prime Minister Alexis Tsipras and his top advisers continued to support the finance minister.
Greek two-year yields fell 250 basis points to a two-week low of 23.55 percent, having risen to 26.87 percent earlier in the day.
They were on track for their biggest daily drop in over a month.
“The Eurogroup meeting in Riga showed Varoufakis was more or less isolated and it seems that Tsipras has understood that,” said Felix Herrmann, a market strategist at DZ Bank.
“The market is a bit relieved… [that] his influence has decreased.”
The earlier rise was a reaction to fruitless debt relief talks between eurozone finance ministers on Friday which only served to highlight the gulf between Athens and its creditors.
“It is difficult to see how an agreement can be made at this stage,” said Gianluca Ziglio, executive director of fixed income research at Sunrise Brokers.
Greek 10-year yields fell 64 basis points to 12.84 percent, while two-year yields were up more than 60 bps at 26.65 percent.
Analysts said large bond coupon and redemption payments this week, which are four times bigger than new supply, should keep a cap on yield rises in debt outside of Greece.
About 60 billion euros is coming back to the market.