Bond market reaction to put off new issue

The Greek bond and stock markets had a negative reaction to Tuesday's government announcements, contrary to what Finance Minister Euclid Tsakalotos said would happen when presenting the handouts planned.

Investors are clearly concerned the about fiscal impact of the measures promised, especially with regards to the "collateral" of 5.5 billion euros of surpluses from the cash buffer, choosing to abstain from Greek assets until they have a clearer picture.

The yield of the benchmark 10-year bond rose 2.8 percent on Wednesday to reach 3.441 percentage points, coming off 14-year lows of 3.285 percent last month. The five-year note saw its yield climb 4.5 percent yesterday to 2.36 percent, from a historic low of 2.171 percent in April.

"The deterioration of the Greek bond market is due to a combination of factors that include the government's plan for the reduction...