Greek bonds continue slide

Date: Wednesday 27 Jan 2010

The spread between Greek bonds and the German benchmark bund widened after the European Commission said the Mediterranean country had failed to adequately address its budget deficit.

The yield on a Greek 10-year bond rose by 44 basis points to 6.68%, taking the spread against German bunds to 350 basis points. The German 10-year bund yield fell two basis points to 3.18%.

Yields rise as bond prices fall. The value of Greek bonds has been hit hard by fears that it will be unable to meet its debt commitments.

UK gilts fell back despite a poor performance from shares which might have been expected to coincide with higher demand for government debt.

There was little in the way of economic news to move bonds and the yield on a 10-year gilt climbed by one basis point to 3.89%.

US treasuries advanced, with market players saying worries over the situation in Greece was sending investors to the safety of US government debt.

The yield on a 10-year treasury fell by three basis points to 3.59%.

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