Reuters — Greek government bonds were in demand on Thursday, with yields dropping following after Moody’s move overnight to upgrade Greece two notches from Caa2 to B3 and maintain its positive outlook. The agency said it believed Greece will return to self-sufficiency and market-based funding.
Greece has also been upgraded by S&P Global and Fitch recently, but Moody’s was not due to review Greece’s rating until later.
“It came as a surprise in terms of the timing – but the overall rating story and economic story on Greece is on track,” said DZ Bank analyst Sebastian Fellechner.
The yield on Greece’s 10-year government bond was 9 basis points lower at 4.34 percent. Shorter-dated Greek 5-year government bond yields dropped as much as 19 basis points to 3.48 percent.
Five-year German bond yields turned positive for the first time since late 2015 at 0.013% in the beginning of February and yields across the euro area hit fresh highs after a European Central Bank policymaker said the ECB should make clear it would end its bond purchases this year.
