Greek bonds (government and corporate alike) remain unattractive internationally despite the particularly favorable conditions in global markets, as investors are still reluctant to take on any Greek risk. Sovereign bond yields climbed again on Tuesday due to uncertainty about Greece fulfilling its prior actions, while corporate bond yields remain at very high levels.
All this is happening while market conditions are very positive, with the European Central Bank regularly buying eurozone state bonds, and, as of today, purchasing corporate bonds too, while, according to Fitch, investors have parked $10.4 trillion in state bonds with negative yields.
The country risk continues to keep investors away from Greece, as despite assurances that the bailout review has been completed, until Tursday Athens had not yet fulfilled all the prior actions required for the disbursement of the 7.5-billion-euro sub-tranche, putting huge pressure on the Greek bond market.
The benchmark 10-year bond yield rose on Tuesday to 7.5 percent from 7.4 percent on Monday, while shorter maturities suffered bigger yield increases: Two-year bonds recorded a rise from 8.1 to 8.5 percent within one day, and three-year debt climbed from 7.9 to 8.1 percent on Tuesday.