Greek Bonds Fall on Political Risk as Disinflation Boosts Bunds

Greek bonds fell, with the 10-year yield climbing the most since May 2012, amid speculation an early presidential election will trigger political turmoil in the nation that sparked the euro region’s debt crisis.

The yield on three-year notes, issued in July as part of Greece’s return to capital markets, surged above the longer-maturity rates on concern Prime Minister Antonis Samaras’s decision to bring forward the selection of a head of state will prompt a general election. That comes at a time when the anti-bailout Syriza party leads opinion polls. With demand for safer assets rising and Europe’s inflation outlook crumbling, yields from Germany to France dropped to records.