Demand for Greek debt continued unabated this week, the pressure driving yield for the 10-year Greek bond to a historic low of 2.69 percent, and with the spread – compared to the German equivalent – below the threshold of 300 basis points, i.e. 296.
Investors’ turn to the safer “harbor” of sovereign debt comes even amid heightened market concerns from ongoing geopolitical developments.
The rally in the Greek bond market is more-or-less accompanied by brighter forecasts for economic growth, now magnified by the prospect of an electoral win by center-right and pro-business New Democracy (ND) in the July 7 snap election.
In the three weeks since the European Parliament election, the cost of borrowing for the Greek state has eased by 70 basis points.
