Greek bond yields drop to lowest since 2014


Greece’s short-dated government bond yields fell to their lowest since 2014 on Friday after eurozone governments threw Athens a credit lifeline worth 8.5 billion euros and sketched out new details on possible debt relief.

Most eurozone yields were a touch lower on the day after heavy selling on Thursday on the prospect of tighter monetary policy in the United States and Britain.

The spotlight was back on the bloc after a late deal on Thursday that allows indebted Greece to avoid a default on bailout repayments due next month.

A French proposal to help bridge differences on debt relief is expected to underpin further eurozone discussions and the International Monetary Fund said it would join the existing bailout, offering Athens a standby arrangement of less than $2 billion.

“This is a major step forward, in our view, coming after many months of uncertainty,” HSBC European economist Fabio Balboni said.

“The deal should pave the way for the [European Central Bank] to include Greece in its [quantitative easing] program, which in turn should unlock access to markets for Greece, putting the country on the right track toward exiting the bailout program next year.”

Greek two-year bond yields fell 20 basis points to 4.76 percent, their lowest level since October 2014, while 10-year yields fell a similar amount to a low of 5.64 percent, the lowest since May 22.