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Boye: No mayhem in bond markets over Greece – yet!
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It’s been a very dramatic morning for European fixed income after talks between Greece and its creditors collapsed over the weekend, says Saxo bank’s Michael Boye. Still, it looks like fears over any contagion from a potential Grexit may have been exaggerated.
Boye stresses that uncertainty remains after the Greek government decided to put proposals from its creditors to a popular vote in Greece, which is taking place on July 5.
But bond traders appear to feel reassured that measures put in place by the euro area, after the debt crisis started a few years ago, will limit any spillover from Greece. Also boosting confidence is the fact the European Central Bank is an active buyer of bonds through its QE programme.
Instead it is the European equity markets that are really feeling the impact after markets rose last week in anticipation of a deal between Greece and its creditors.