Fixed income

The door is now wide open for the entry of quality and long-term investors, who manage trillions of dollars, into the Greek bonds market: Bloomberg Index Services, a global provider of government bond indices, has become the first to include Greek bonds among the elite of the debt markets, announcing that 17 Greek bonds worth 73 billion euros are to be included in its index series as of January

Τhe 10-year Greek benchmark bond yield has this week fallen to its lowest levels in 10 months, returning to levels last seen in August 2022. 

Traders said market sentiment remained positive despite comments made by European Central Bank officials over the possibility of fresh interest-rate increases. 

The decision of the Public Debt Management Agency to tap the markets at the exact moment the pre-election period begins and to capitalize at the same time on the improvement that has occurred in the bond market, which is seen as a safety net for investors amid the still-simmering banking crisis, turned out to be absolutely correct.

The state will incur new debt. It is clear from the BNB website that a new half a billion lev debt will be offered to investors next Monday, this time on government securities with a maturity of 3.5 years.

Such an issue has not been used in the last few years, and the Ministry of Finance resorted to it after the 5-year and 10.5-year securities used this year became more expensive.

JP Morgan expects a new Greek entry into the markets in the coming weeks, either through the issuance of a new reference bond (5-7 years) or through the opening of bid books for existing securities (10 years), proposing a partial profit in view of the new offer of securities.

Greece is making its first market foray for 2021, probably on Wednesday, with the issue of a new 10-year bond to further strengthen its cash reserves. The market had more or less expected a 10-year note, despite some investment companies foreseeing longer issues.

The Turkish Treasury and Finance Ministry on Nov. 25 said its issuance of a dollar-denominated bond due in 2031 finalized with a nominal amount of $2.25 billion, seeing high demand from international capital markets.

As part of the 2020 external financing program, Goldman Sachs, HSBC and Morgan Stanley were authorized on Nov. 24 to issue the bonds.

Foreign investors are increasingly demonstrating their confidence in Greek debt, with Greek bond yields dropping below those of Italy on Wednesday, while strong demand for a 26-week treasury bill issue saw its interest rate tumble.

Southern European bond yields fell by about 10 basis points on Friday as markets remained focused on European Central Bank action to mitigate eurozone economic stress and prevent Italy's credit rating from tumbling into junk territory.
European Union leaders agreed a 1.5-trillion-euro rescue package but delayed a decision on the program's details until the summer. 

Italian bond yields soared on Monday while safe-haven German debt yields hit new record lows and eurozone inflation expectations tumbled to unprecedented levels as a crash in oil prices amplified recession fears spurred by coronavirus.