The market has been quietly pouring money into Southern Europe…. Spanish and Italian 10-year government bond yields have fallen to all-time lows, in Spain’s case last week falling below 3% for the first time. Portugal and Greece have regained access to bond markets on sufficiently favorable terms for both to contemplate clean exits from their bailout programs… Greek banks have been able to raise more than €6 billion ($8.32 billion) in equity…. None of this was imaginable at the start of the year.
Portugal’s 10-year bond yields currently trade around 3.65 percent – close to the lowest levels in eight years – after peaking near 17 percent at the height of the debt crisis in 2012.
Spain has also benefited from this trend. Recent debt offerings by the Spanish treasury have offered much lower interest rates. On Friday, yields on Spanish 10-year government bonds fell to 2.97 percent, matching the intraday record low set in 2005.
Greece, which is still receiving an international helping hand, also managed to return to the bond markets in April, selling €3 billion in bonds with a yield of about 4.75 percent. It was the country’s first sale of sovereign debt in four years.