Irish Bonds Drop; Greek Yield Spread Reaches 1,000 Basis Points
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Ireland’s bonds led a third day of declines by the securities of Europe’s most indebted nations after Moody’s Investors Service cut the nation’s credit rating to the lowest investment grade.
The spread between Greek 10-year debt and equivalent German securities widened to 10 percentage points, while Spanish bonds slid for a third day. German two-year notes declined as data showed European inflation accelerated. Moody’s today lowered Ireland to Baa3 from Baa1 and left its outlook negative, meaning more cuts will probably follow. A report yesterday cited German Finance Minister Wolfgang Schaeuble as saying Greece may need to renegotiate its debt burden.