Benchmark bond yield climbs to year-high

The Greek bonds market has deteriorated further this week following the Eurogroup’s decision to postpone the payout of the 5.7-billion-euro bailout tranche to Greece and the disagreement between Finance Minister Euclid Tsakalotos and European Central Bank President Mario Draghi.

The yield on the new seven-year note rose to 4.05 percent on Tuesday – its initial rate of return on February 9 was 3.5 percent. The five-year bond yield was 3.43 percent on Tuesday, edging closer to early January’s 3.47 percent year-high.

The yield on the benchmark 10-year paper climbed to a 2018 high of 4.38 percent, against 4.10 percent at the start of the year and a low of 3.62 percent on January 17. The spread between the Greek bond and the equivalent German bund came to 365 basis points,.

France’s Societe Generale said Greece’s fundamentals remain problematic in the medium term, while Britain’s Janus Henderson Investors said Greek bonds are not the ideal investment “due to long-term challenges.”