The yield in Greece’s 10-year Treasury bond continued to dive on Thursday, outpacing even Italy’s where the rally was fueled by the agreement between the Five Star Movement and the Democratic party to form a coalition, pushing Lega Nord and its controversial leader, Matteo Salvini, into the opposition.
The 10-year bond’s yield dropped almost 10 basis points, or 9.7 percent to a new all-time low of 1.55 percent, while the new 7-year bond’s yield dropped to 1.36 percent and the 5-year bond to 0.91 percent. The Greek state’s borrowing cost has dropped a whopping 65 percent since the start of the year, when the 10-year bond had a yield of almost 4.4 percent. Analysts believe the drop will continue.
To put this in perspective, the 10-year Treasury bonds of 13 countries have a negative yield, alongside many other bonds and T-bills, whose total value exceeds 15.6 trillion dollars.
It was not only the news from Italy, however, that fueled the Greek bonds. Even more important was the Greek government’s decision to lift the remaining capital controls imposed in the summer of 2015 as of September 1.