Greece's Bonds Rise With Stocks Amid Progress in Bailout Talks

  • Nation's 10-year debt yield falls to lowest since January
  • Dijsselbloem says progress has been made, but work still to do

Greece’s government bonds rose for a third day, with the 10-year yield falling to the lowest in three months, after euro-area finance ministers and the International Monetary Fund signaled that a deal on the nation’s next bailout installment is in sight.

Greek stocks climbed to the highest since January as Jeroen Dijsselbloem, the Dutch finance minister who chaired a meeting of his euro-zone counterparts in Amsterdam Friday, said substantial progress had been made toward agreeing on the austerity measures needed to release the next tranche of loans.

There’s still work to do, Dijsselbloem said, but in a sign differences are being ironed out, IMF Managing Director Christine Lagarde told reporters that debt sustainability is feasible without a haircut -- a reduction in the amount Greece must repay.

“The market seems a bit too upbeat about a positive outcome to the review given the news flow we’re getting and since it could drag for quite a long time,” said Gianluca Ziglio, a strategist at Sunrise Brokers LLP in London. He said he “would expect a correction wider any time.”

The yield on Greece’s security due in July 2017 fell 90 basis points, or 0.9 percentage point, to 9.99 percent as of 3:44 p.m. London time. The 3.375 percent note rose 0.94, or 9.40 euros per 1,000-euro ($1,125) face amount, to 92.685. The nation’s 10-year bond yield dropped 26 basis points to 8.53 percent, after touching 8.46 percent, the lowest since Jan. 14.

Greek government bonds have lost 0.3 percent this year, the only euro-zone sovereign securities to decline apart from Portugal’s, according to Bloomberg World Bond Indexes.

Greece’s ASE Index rose for a fourth day to the highest closing level since Jan. 5, outperforming benchmark stock indexes in Germany and France, which fell. The Greek gauge has rebounded 37 percent since reaching a 26-year low in February.

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