Greek 10-yr bond yields drop to two-year low


Greek 10-year bond yields fell sharply to two-year lows on Wednesday, tightening the gap over 10-year German Bunds, with analysts citing a report about a new debt reduction plan.

Greece’s benchmark 10-year bond yield fell more than 40 basis points on the day to 6.64 percent, its lowest level since October 2014.

That pulled the spread over top-rated German peers to around 640 bps, its tightest level in about two years.

Analysts cited a media report saying the European Stability Mechanism, created by eurozone governments to help countries in difficulty, is proposing new measures to reduce Greece’s debt load as the main driver behind the move in Greek bond yields.

Greece is pushing its creditors to fix the borrowing costs on its massive debt pile at current low levels in a bid to save millions of euros in coupon payments if interest rates rise.