Greek 10-year bond yields fell sharply on Wednesday on a report saying Mario Draghi was set to push the European Central Bank to buy junk-rated Greek and Cypriot bank loans.
The central bank’s executive board will propose that current requirements on the quality of assets accepted by the bank be relaxed to allow the ECB to buy repackaged debt, or safer slices of Greek and Cypriot asset-backed securities, the Financial Times reported, citing people familiar with the matter.
Greek 10-year government bond yields fell 38 basis points to 6.27 percent.
“This indicates there is still support from official lenders. They want to avoid Greece derailing again,” ING senior rate strategist Alessandro Giansanti said.