Thursday, August 18 2022
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Sharp drop for Greek bond yield

Sharp drop for Greek bond yield

Eurozone bond yields and spreads plummeted sharply on Friday, following statements by European Central Bank head Christine Lagarde about the new anti-fragmentation tool.

The yield on the benchmark 10-year Greek bond plunged 7% in one day and fell below 4 percentage points, while the spread with the German bunds moved to 255 basis points, reverting to levels last seen before the regular meeting of the ECB on June 9; that triggered a strong sell-off in the market, sending the Greek spread over 300 bps and the yield over 4.7 percentage points one day before the extraordinary meeting of the Board of Directors on June 15.

Italian bonds marked a smaller improvement, with the yield at 10 years falling by 3.5% and 3.7%, while the spread was limited at 205 bps.