Insider Economy Greek bond yields near record lows as IMF repayment hopes grow

Greek bond yields near record lows as IMF repayment hopes grow

Greek government bond yields were closing in on record lows on Monday after an official said a deal to repay International Monetary Fund loans is imminent, which would mark another step forward from the Athens’s debt crisis.

A senior official said late on Friday that Greece was looking to strike a deal over the weekend to repay early about half the loans it got from the IMF, in a bid to lower its debt-servicing costs.

Greece’s benchmark 10-year government bond yield slipped to 3.29 percent, its lowest since September 2005 and approaching the record low of 3.203 percent.

Five-year yields also reached a 13-year low of 2.16 percent late last week.

“If they do accomplish the early repayment, that helps them reduce the interest rate burden, and adds to what has been quite a good performance story,” said Commerzbank rates strategist Christoph Rieger.

Sources told Reuters that Greece is planning a bond issue in late June to raise money for the repayment.

Most euro zone bond spreads have been tightening after Europe and China released improved data late last week. German 10-year yields, the benchmark for the region, hovered near a three-week high at 0.054 percent.

Euro zone industrial output declined in February but by less than expected, as mild weather meant a surge in energy production at the start of 2019 reversed.

“With improved sentiment the picture for spreads should remain supportive with the central bank still on the cautious side,” rates strategists at ING said in a note.

They said “semi-core” spreads — referring to the likes of France and Belgium — should benefit the most, but Italian bond spreads could also tighten, given some supply constraints.

And Italian yields were lower across the board on Monday. The benchmark 10-year yield fell two basis points to 2.52 percent, and the Italy/Germany 10-year yield spread tightened to 246 bps.

(Reuters)

Top Stories

How European Banking Supervision can help fight economic impact of coronavirus outbreak in Europe

By Andrea Enria, Chair of the Supervisory Board of the ECB These are dramatic days for Europe and its citizens. The coronavirus outbreak has severely...

U.S. could face 200,000 coronavirus deaths, Fauci warns

U.S. deaths from coronavirus could reach 200,000 with millions of cases, the government's top infectious diseases expert warned on Sunday as New York, New...

Limassol: 45 booked in 12 hours for breaking decree

  Limassol police officers on Sunday booked another 45 people for breaking the stay at home decree as police spokesman Ioannis Soteriades told CNA that...

Two more test positive in Turkish-held north

Two more have tested positive in Turkish-held north Cyprus, bringing the total to 64, the Cyprus News Agency reports. It said that three of the...

Minister rebukes irresponsible behaviour

Health Minister Constantinos Ioannou on Sunday expressed concern over the large increase in the number of confirmed Covid-19 cases saying tracing had shown that...

Taste

Village salad

A must-have with every meal is a village salad. You will find it in every tavern or greek restaurant you visit in Cyprus. Make...

Courgettes with eggs

Heat the oil in a frying pan and fry the courgettes at a medium heat until they soften. Add salt and add the eggs....

Classic Pastitsio

Prepare the mince sauce: heat the butter in a pan and sauté the mince with the onion and garlic until nicely browned, mixing well....

Grilled vegetable and goat cheese rolls

Brush the vegetables with olive oil and season. Heat a pan/griddle and cook them carefully until golden on both sides, making sure their shape...