Greek government bonds are gaining ground, with their yield spread over German bonds narrowing to below 0.8%. Notably, on Thursday, the yield on Greece’s 10-year bond stood at 4.15% on the Bank of Greece’s Electronic Secondary Securities Market (HDAT), despite sellers dominating trading.
Of the €121 million in total transactions, €86 million involved sell orders, compared with just €35 million in buy orders. Based on yields recorded on the same day, the spread over the German 10-year Bund, which stood at 3.36%, was approximately 79 basis points (0.79%).
This gap remains considerably narrower than those of France and Italy. The trend over the past month has been more favorable than the daily movement suggests. The Greek 10-year yield has fallen by some 19 basis points over the period, from 4.36% on October 13.
The decline translates into lower borrowing costs for the Greek state and, at the same time, a lower return demanded by investors to hold Greek debt.