February 6, 2020 / 2:11 PM / 19 days ago

Greece's 10-year bond yield touches new record low

LONDON, Feb 6 (Reuters) - Greece’s 10-year government bond yield touched a new record low on Thursday, a move analysts put down to news that the euro zone bailout fund had waived Cyprus’s mandatory repayment obligation of loans.

“The ESM (European Stability Mechanism) has announced that a compulsory payment due from Cyprus has been waived, showing some leniency towards countries that have been in bailout conditions, so that may have fed through to positive sentiment towards Greece,” said Rabobank rates strategist Matt Cairns.

Yields on the Greek 10-year bond fell more than 4 basis points to 1.143%, a new record low.

A Fitch Ratings upgrade last month has helped accelerate a fall in Greek bond yields.

The Greek economy continues to improve and chances are rising that the European Central Bank will eventually buy its debt under its asset purchase scheme, ECB President Christine Lagarde said earlier on Thursday.

Greek bonds are currently ineligible for purchase as they are rated ‘junk’ by all major rating agencies, failing a key ECB requirement. (Reporting by Dhara Ranasinghe Editing by Tommy Reggiori Wilkes)

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