Ratings upgrade lifts Greek debt
LONDON – Reuters
Greek government bond yields dipped yesterday after a ratings upgrade from Fitch that highlighted improving sentiment towards the indebted southern European state.
That marked an outperformance of euro zone peers, with yields across the currency bloc creeping higher in the absence of any fresh drivers. Overall trade was subdued due to public holidays in Asia and the United States.
That marks the second ratings upgrade this year - SP Global Ratings last month lifted Greek ratings for the first time in two years on improvements in the finances and fiscal outlook for the debt-laden nation.
“Greece’s ratings story is on track and strongly supported by progress in reforms,” said DZ Bank rates strategist Sebastian Fellechner.
“Keep in mind that it is possible that Greece will get debt relief, which is a supportive factor.”
Greece’s 5-year bond yield was down 5 basis points at 3.39 percent early on Monday, outperforming euro zone peers.
The gap between 10-year bond yields in Greece and top-rated Germany was at around 351 basis points and close to its tightest in a week. With the exception of Greece, 10-year bond yields in the euro area were 1-2 basis points higher - unwinding falls on Feb. 16.
Analysts said sentiment towards bonds remained bearish given expectations of major central banks stepping back from ultra-loose monetary policies.