Bond spreads and CDS prices fell significantly on Monday and the market also welcomed a decision by EU leaders to raise the funds of a European Financial Stability Fund along with offering the ability to purchase state bonds in the primary market.
Greece’s credit default swaps fell by 60 basis points to 985 basis points, with all other regional eurozone states’ swaps falling with the exception of Ireland. The yield spread between the 10-year Greek and German benchmark bonds eased below 940 basis points, from 965 basis points early in the day.
Dimitris Drakopoulos, an economist at Nomura International in London, told Bloomberg that a decision allowing the EFSF to buy state bonds in the primary market could facilitate Greece to return to capital markets in the first quarter of 2012.
SOURCE: ANA-MPA
