Press reports asserting that the European Financial Support Fund will adopt a more aggressive policy in a plan to resolve Eurozone’s debt problems, by buying securities of over-indebted countries through private placement, generated enthusiasm in regional bond markets on Tuesday.
In the Greek electronic secondary bond market, the yield spread between the 10-year Greek and German benchmark bonds fell to 776 basis points on Tuesday, from 810 bps on Monday, with the Greek bond yielding 10.97 pct and the German Bund 3.21 pct.
Greek CDS (credit default swaps) fell to 827 basis points. Turnover in the market was an improved 110 million euros, of which 72 million were buy orders and the remaining 38 million euros were sell orders. The five-year bond was the most heavily traded security with a turnover of 28 million euros.
In interbank markets, interest rates moved higher. The 12-month rate was 1.66 pct, the six-month rate 1.33 pct, the three-month rate 1.08 pct and the one-month rate 0.91 pct.