Debt deal pushes Greek bond yields to lowest since 2014

LONDON: Greece’s short-dated government bond yields fell to their lowest since 2014 on Friday after euro zone governments threw Athens a credit lifeline worth 8.5 billion euros ($9.5 billion) and sketched out new details on possible debt relief.
Broader euro zone debt markets were largely steady as calm returned a day after the prospect of tighter monetary policy in the United States and Britain triggered heavy selling.
The spotlight moved back to the euro zone, following a late deal on Thursday that lets indebted Greece avoid a default on bailout repayments due next month.
Some analysts said the agreement could open the door for the European Central Bank to start buying Greek government bonds under its stimulus scheme in the coming weeks, and possibly pave the way for a return to markets.
The ECB needs more clarity on what kind of debt relief Greece will get from its international creditors if it is to buy Greek bonds as part of its stimulus programme, a source close to the matter said on Friday.
A French proposal to help bridge differences on debt relief is expected to underpin further euro zone discussions and the International Monetary Fund said it would join the existing bailout, offering Athens a standby arrangement of less than $2 billion.
Greece’s 2-year bond yield fell to its lowest level since October 2014 at 4.81 per cent, while 10-year yield fell as much as 15 basis points to 5.71 per cent, the lowest since May 23. — Reuters