3 JUN 2011
Irish bond yields manage to hold firm despite bad news on jobs front
By Donal O'Donovan and Sarah Collins | Irish Independent
EU Commissioner Olli Rehn has said Greece can avoid a debt restructuring by a combination of lender patience and radically tackling its deficit. He added that a plan for Greece is now only days away.
The comments set the market tone on a day when sovereign debt, including the bonds of the weaker eurozone economies, proved less volatile than corporate debt or shares.
Greek and Irish government bonds traded sideways yesterday as the market waits for confirmation later this week about the true state of Greek finances.
The yield on 10-year Greek bonds edged up from 15.8pc to 15.9pc but remains well off recent highs. The yield on two-year Greek bonds fell.
Irish debt yields were more volatile but 10-year yields ended the day at 10.75pc, down on the previous day. The yield on Irish two-year government bonds fell more sharply. Irish two-year bond yields have fallen from 12.175pc to 10.6pc over the past three weeks.
Those yields held firm despite a plethora of bad news regarding industrial output and job from Europe and the US.
Mr Rehn's comments include the prospect of tying banks into a deal to roll over Greek debt as it falls due. That would help prevent Greece being driven to a default and reduce the amount of cash needed to fund debt repayments.
In return, banks will get goodwill from political leaders, no small thing, but may also get better terms on the rolled over debt.
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