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FxWirePro: Is Greece a comeback story now?

Greece is making a comeback, at least the bond market is pointing to that direction.

  • The 10-year yield on Greek bonds have declined to 328 bps in April, down from 373 bps in March, and 438 bps at the end of 2018. This is the lowest yield for the debt-strapped nation in 14 years, which saw its bond yield to skyrocket to 37 percent at the height of Eurozone debt crisis of 2011/12, prompting a sovereign rescue package from European Commission.
  • Despite the rescue package which had the backing of wealthier Eurozone countries such as Germany and the International Monetary Fund (IMF), investors have been on the edge, when it came to investing in Greek bonds. Even in 2015, faced with economic concern, Greek 10-year yields jumped to as 16 percent.

However, this time it seems investor is eager to invest in Greek bonds. Last month, Greek sold €2.5 billion worth of 10-year bonds at 3.9 percent yield. The order book topped €11.8 billion, suggesting robust demand.

According to IMF, the country has finally entered the growth phase, where it is set to outperform the majority of the countries in the Eurozone. In 2019, GDP is expected to grow by 2.4 percent much higher than 1.3 percent growth in the entire Eurozone economy.

  • Market Data
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