Greek bond yields keep sliding as another foray appears likely

Expectations that the European Central Bank will loosen monetary policy, turning investors to eurozone periphery bonds, and domestic political developments led Greek bond yields into a fresh dive on Tuesday, paving the way for another market foray after this Sunday’s general election.

Despite their recent rally, Greek bonds continue to have the highest yields in the eurozone, with the benchmark 10-year note at 2.2 percentage points, having dropped 6 percent or 15 basis points to a new historic low, while the spread against the German bund dropped to 255 bps, the lowest since January 19, 2010.

The yield on the five-year sovereign bond fell 8 percent to 1.22 percentage points, also a historic low. Likewise, the 15-year bond yield dropped to 2.65 percentage points and the 20-year paper saw its rate slip to 2.8 percentage points.