Greece 10-year bond yield falls to 6-month low

Greece’s government bonds rose for a third day, pushing the 10-year yield to the lowest level since the nation’s debt was restructured in March. The earlier low of 17.67 percent was broken on the back of Greek political coalition now reaching an agreement over the 13.5 billion euro budget deficit reduction plan in a bid to justify renewed aid of 31 billion euro. Addition to this German Finance minister Wolfgang Schauble recently reaffirmed Greek’s stay within the euro zone ahead of the key EU summit to be held on Oct 18, acted as a catalyst for Greek bond. At the same time, when yield dropped the rally in the single currency was witnessed, surging from 1.29 to 1.2970. This shows that the movement of euro has been in an inverse proportion to the yield on the ten year benchmark bond. Going ahead, this week EU summit is scheduled in Brussels on Oct. 18-19 and if it turn out to be positive for the market should indeed ease the pressure in yields of the peripheral regions and a break of recent confine range in Euro on upside will be inevitable.

Below graph shows Greece Ten year bond yield with Euro

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