Greek Bond Auction Welcomes 4 Year Low Yields

Greece is set to return to the bond markets for the first time in four years, a key signal that its crisis-hit economy is welcomed once more by investors.

“Greece is back,” analysts at Credit Suisse proclaimed. After a grueling austerity program under the terms of its two bailouts international lenders, and possibly more importantly European Central Bank President Mario Draghi’s pledge to do “whatever it takes” to save the euro, Greece is no longer talked of as the first country likely to leave the single currency.

The Greek finance ministry confirmed in a news release on Wednesday that it would launch a five-year bond in the “near future”. It is seen auctioning around 2 billion euro ($2.78 billion) worth of debt.

The yield is expected to be around the 5.4 percent mark, a better investment return than the current 4.79 percent, as authorities want to offer a little sweetener to investors, according to CNBC sources in Athens.

Ahead of the auction, yields for 10-year Greek bonds fell to 5.951 percent on Wednesday–their first time below 6 percent in four years.

In comparison, Portuguese 10-year bonds were yielding 5.889 percent. 10-year German bunds yielded 1.583 percent and U.S. Treasurys yielded 2.7134 percent.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza