ATHENS: Greece bonds plunged, pushing 10-year yields to the highest this month, as speculation grew that the nation’s financial system may be just weeks from running out of cash.
The drop was mirrored elsewhere in the euro-zone bond market, where a two-day rally proved short-lived and investors dumped securities with yields still near historic lows. German bunds joined Italian and Spanish debt to slide for the first time since May 13.
“It’s definitely been triggered by Greece but it’s not that the market is heading toward panic, it’s just the usual market reaction when there’s news-flow like we’re seeing currently,” said Daniel Lenz, lead market strategist at DZ Bank AG in Frankfurt. “There needs to be an agreement soon, otherwise it’s very likely that there’d be a default.”
Greece’s 10-year bond yield rose 69 basis points, or 0.69 percentage point, to 11.45 percent as of 12:50 p.m. in London. The 3 percent security due in February 2025 fell 2.775, or 27.75 euros per 1,000-euro ($1,140) face amount, to 54.265 percent of face value.
