German government bonds are opening higher Friday on risk-aversion after the Eurogroup delayed full payment of Greece’s second bailout package. The Eurogroup decided to hold back half of Greece’s E130bln bailout funds yesterday until it is satisfied Athens has implemented 38 austerity measures it agreed to. Whilst the threat of an imminent Greek default was averted yesterday after the ISDA no vote on CDS, however, the markets are expected to trade cautiously amid ‘the ISDA (ides) of March’. The industry trade body added that “the situation in the Hellenic Republic is still evolving” and warned it could revisit its decision of a credit event occuring if the Greek government forces restructuring, by the use of Collective Action Clauses (CAC). The Eurogroup will now meet on Mar 9, which is one day after the deadline for private bondholders to participate in Greek PSI and will announce decision on the 2nd tranche of the Greek bailout on Mar 12 — eight days ahead of the crucial date for payment of its E14.4bln bond redemption.
StockMarketNews Research Team