Bonds: Yield of Greek 10-year again breaches 5%

The yield of the Greek ten-year bond exceeded 5% again at noon on Wednesday. At 14:30 Greek time, it touched 5.04%, with the spread being 2.69%.

The Greek 10-year bond is being weighed down by widespread pressure in the eurozone bond market, the yields of which rose on Wednesday after the Bank of England (BoE) said it would start selling some of its British government bonds from November 1.

Britain

Britain’s central bank was forced to start buying bonds again last month after the government’s plans for unfunded tax cuts – which have now been almost completely reversed – sent the long-dated bond market into chaos.

Germany’s 10-year government bond yield was last up 7 basis points (bps) at 2.343%. Yields rise as prices fall.

ECB and interest rates

Although the UK turmoil has caused volatility, the European Central Bank‘s interest rate policy has been the key factor driving bond yields higher this year.

Antoine Bouvet, senior rate strategist at ING, said calmer market conditions meant “bond yields are free to continue their upward trend.”

Economists believe the ECB will opt for another 75bp rate hike. of its key interest rate at its Oct. 27 meeting, according to a Reuters poll published on Wednesday.