Bond markets have finally absorbed the initial shock caused by Russia’s invasion of Ukraine. In the early hours of the morning, when the war operations became known, prices fell sharply, resulting in bond yields soaring. Indicatively, the yield on the Greek 10-year bond jumped to 2.65%, but then the yield on the bond fell to 2.58%, remaining with small fluctuations at these levels until the close of the market, early in the afternoon.
The statements of the Governor of the Bank of Greece, Giannis Stournara, also contributed to the normalization of the market, who boldly argued that the European Central Bank should not announce the end of the quantitative easing program (APP) in March, while proposing to continue until the end. year. It is noted that if this proposal is adopted, the increase in interest rates is postponed for the first quarter of 2023, at least.
At the same time, the BoG governor recommended greater flexibility and choice in the decisions of the ECB, from which, according to market executives, Greek bonds can be benefited, which, as is well known, are not included in the APP program.
However, the continuation of the bond purchase program does not lead to the continuation of abundant liquidity to the banks as, as Mr. Stournaras stated, “we have before us a contractionary change in the monetary policy that will take place through the repayment of TLTROs, because the very favorable “Interest rate conditions will probably cease to exist in June. And then TLTRO repayments will probably start to be recorded, so we will have a de facto contractionary change in monetary policy and a reduction in the size of the Eurosystem’s balance sheet.”
In the domestic market and more specifically in HDAT, transactions amounting to 12 million euros were recorded, of which 6 million euros related to purchase orders. The yield on the 10-year bond closed at 2.61% from 2.62% yesterday against 0.15% of the corresponding German bond, resulting in a margin of 2.46% from 2.38% that closed yesterday.
In the foreign exchange market, the dollar has been gaining so far. The European currency fell slightly, as in the early afternoon the euro was trading at $ 1.1133, from the level of $ 1.1309 that the market opened.
The indicative price for the euro / dollar exchange rate. announced by the ECB stood at $ 1.1163.
SOURCE: ΑΠΕ-ΜΠΕ
Source: Capital
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