Greek bond yields surge as investors take cover from exit risk

Greek bond yields were set to rise by up to 10 percentage points according to early pricing on financial platforms on Monday as the country closed its banks and imposed capital controls, raising investor fears it will leave exit the euro.

Investors sought refuge in safe-haven German government bonds, the eurozone’s top-rated sovereign debt, and ditched other low-rated bonds from the bloc’s southern periphery.

Greece’s two-year bond yields were set to open over 1000 basis points higher at 31.71 percent, according to prices on Tradeweb, while 10-year yields were set to rise 300 bps to 14.15 percent. Greek bond markets normally open around 0730GMT.

German bond yields dropped over 20 bps in early trades to a one-month low of 0.71 percent, while Portuguese, Italian and Spanish equivalents climbed over 30 bps.

[Reuters]