Thank goodness for having currency relatives with deep pockets.Greek bonds appear to be rallying after tough talk from Eurozone made some sort of rescue appear highly likely, despite the fact that Germany and France are playing hard to get so far.
The yield on the security fell yesterday to its lowest since Feb. 15 as investors speculated the European Union and Greece will soon agree on an aid package. Papandreou will meet with his German counterpart Angela Merkel on March 5. Merkel and other EU leaders want Greece to do more so they can justify helping the Mediterranean nation as political opponents say a bailout would reward fiscal irresponsibility.
“Developments surrounding Greece are still driving the euro-govie markets,” Norbert Aul, a fixed-income strategist at Commerzbank AG in Frankfurt, wrote in a note to clients today. “While the game of rumour and denial about a Greek bailout plan led by Germany and France is taking shape continues, the market seems to still believe that help for Greece might be around the corner.”