Greece 2-year bond yields hit 6-week high on IMF warning

The Greek 2-year bond yields reached 6-week high on Wednesday after the IMF painted a grave viewpoint for its economy and re-established calls for its hesitant EU accomplices to grant substantial debt relief. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, moved higher 1.24 pct to 9.326 pct and the yield on the 2-year Treasury bond rose 12.01 pct to 12.358 pct by 1310 GMT.

As the latest talks on Greece's bailout review were temporarily adjourned on Tuesday, the head of the euro zone's fund said the reforms required to release further financial aid to the country were getting difficult. These delays have reignited concerns that Athens may not receive the 5 billion euros in bailout aid, most of which will be used to repay 3.5 billion euros to the International Monetary Fund and the European Central Bank in July.

"As talks between the two sides deteriorate and we don't get a solution, the more investors are getting increasingly nervous that they won't be able to rollover the debt in the summer," said Nick Stamenkovic, bond strategist at RIA Capital Markets.

The IMF estimated that Greece GDP has collapsed by 0.2 pct in 2015, and foresees that recession of the GDP will raise to 0.6 pct in 2016 and by 2017 the Greek economy will develop with a 2.7 pct rate. The IMF insists that the 1.1 pct deflation of 2015, will stabilize in 2016 and by 2017 it will raise by 0.6 pct.

"The Greek situation is a problem that is going to recur at some point further down the line, it is just a question of when", said Credit Agricole strategist Orlando Green.

"The big issues about debt sustainability have not been removed despite the various bailouts that have been put in place", he added