Greek authorities bond yields hit recent lows on Wednesday because the promise of extra central financial institution largesse within the face of a spreading Delta variant lifted demand for even the bottom rated euro zone international locations.
Different euro zone bond yields additionally dipped to new lows forward of a gathering of the U.S. Federal Reserve, with the world’s most necessary central financial institution additionally anticipated to maintain the stimulus faucets open.
Greece’s sturdy efficiency comes at a time when most Southern European debt has benefited from the cautious stance taken by the European Central Financial institution in current conferences and a shift in coverage targets which have dovish implications.
“Greek five-year yields hitting an all-time low is straight associated to the ECB quantitative easing programme, particularly the PEPP programme,” stated Investec economist Philip Shaw.
He was referring to the central financial institution’s pandemic emergency buying programme launched final yr in response to the COVID-19 disaster that included Greek authorities bonds for the primary time because the ECB began asset purchases.
“The advance of the European Union vaccination programme has additionally helped, and Greece is a beneficiary of that in fact,” he added.
Greece’s benchmark 10-year authorities bond yield dropped to a 7-month low of 0.614% because the promise of extra central financial institution stimulus boosted demand for euro zone authorities debt.
Greece’s 5-year bond yield additionally dropped additional into unfavorable territory to hit a brand new report low of -0.137%. It was down 1.4 bps at 0724 GMT. GR5YT=RR
Afterward Wednesday, the U.S. Federal Reserve is about to conclude its two-day assembly, with policymakers divided over how to answer rising inflation within the face of elevated coronavirus infections.
U.S. Treasuries yields held regular forward of the assembly. The ten-year U.S. Treasury yield was unchanged at 1.2327%, a long way from final month’s low of 1.128%.
Main euro zone bond yields hovered close to current lows, with Germany’s 10-year authorities bond yield hitting -0.45% for the primary time since early February.
Supply: Reuters (Reporting by Abhinav Ramnarayan; Modifying by Saikat Chatterjee and Joe Bavier)