Bonds drop for second day
Greek10-year government bonds fell for a second day yesterday after Moody’s said there is a 50 percent chance that the country will default.
“The market’s focus is on when we will get the new bailout package and what conditions will feature, and that’s continuing to be the name of the game,” David Schnautz, a fixed-income strategist at Commerzbank in London, told Bloomberg.
Greek 10-year yields rose 10 basis points to 16.26 percent. The 6.25 percent security due June 2020 slipped 0.300 or 3 euros per 1,000euro face amount, to 54.210.
Moody’s downgraded Greece to Caa1 from B1, the same level as Cuba, late Wednesday.
Yesterday, the euro gained versus the dollar to the highest level in almost a month as German Chancellor Angela Merkel said she’s committed to the shared currency.
The European shared currency gained as policymakers considered asking investors to reinvest in new Greek debt when existing bonds mature. The euro rose 0.9 percent to $1.4453.