Athens: Greek bond yields reached Euro-era records amid growing speculation the country will need to restructure its debt as financing costs mount.
German debt slid as data showed European services and manufacturing growth unexpectedly accelerated, bolstering the case for higher interest rates. Greece sold €1.625 billion (Dh8.52 billion) of 13-week bills amid lower demand and a higher interest rate than the previous auction of similar debt.
Greece's two-year yield rose 25 basis points to 20.59 per cent, the highest since the introduction of the shared currency.
"The fact that Greece was able to overcome this particular hurdle will provide some relief," said Orlando Green, assistant director of capital-markets strategy at Credit Agricole Corporate and Investment Bank in London. "There's still a concern over liquidity. There hasn't been a shift to positive sentiment, and they're not out of the woods yet."
The Greek ten-year yield fell 7 basis points to 14.48 per cent after rising as high as 14.66 per cent earlier, a euro-era record, before the auction.
Tuesday's Greek sale was priced at a yield of 4.10 per cent, up from the 3.85 per cent rate at an auction of similar debt on February 15. Investors bid for 3.45 times the amount of securities offered, down from the previous bid-to-cover ratio of 5.08.
Wider spread
The yield difference, or spread, between the nation's 10-year bonds and German securities of a similar maturity, earlier reached 1,138 basis points. That's the most since 1998, when Bloomberg began collecting the data.
German bunds fell for the first day in six. A composite index based on a survey of Eurozone purchasing managers in both industries rose to 57.8 in April from 57.6 in March, London-based Markit Economics said.
