Ten-year bond spread narrowest since October

The premium demanded by investors to hold 10-year eurozone government bonds other than benchmark German Bunds fell yesterday, in some cases to levels pre-dating the collapse of US investment Lehman Brothers last September, Reuters reported. The Greek 10-year bond yield was at 104 basis points, its narrowest since October 22. At the start of the year, it had widened to 281 basis points. The 10-year Italian BTP/Bund yield spread edged in to 63 basis points from 65 bps at the European settlement close on Monday. The spread was tightest since September 4 – before the collapse of Lehman Brothers in mid-September.