Italy’s borrowing costs were approached by Greece today as the expectation of an upgrade of the country’s credit rating by Standard & Poors combined with the positive report published today by the IMF formed a positive sentiment in the markets.

The bond market moved higher resulting in yields falling to the levels of Italian securities.

Investors’ interest is focused on Standard & Poor’s decision on the country’s credit rating, which is expected to be announced on April 21.

However, as the head of the Central Bank of Greece, Giannis Stournaras, said today, the bond market has already discounted the upgrading of the country’s credit rating to investment grade, which, according to him, is estimated to take place within this year.

It is indicative that today the yield of the Greek 10-year bond equaled that of the corresponding Italian bond, at 4.15% with the result that both countries have a common margin (risk) against the corresponding German one, namely 1.86%

In addition to the expected upgrade of the country, Greek bonds were also positively affected by the International Monetary Fund’s positive Public Debt Report.

The IMF underlines that due to high inflation and growth, the Public Debt of Greece managed to show a significant reduction.

“Countries such as Greece, which had large initial levels of debt, combined with large inflation surprises and strong growth also had a significant reduction in their debt,” reports the Fund. According to the Fund’s estimates, Greek debt decreased significantly and fell from 200.7% of GDP in 2021 to 177.4% in 2022.

In the secondary market, in the Electronic Transaction System (HDAT) the volume of transactions was 56 million euros, of which 26 million euros related to purchase orders. The benchmark 10-year bond yield was 4.15% versus 2.29% for the corresponding German bond, resulting in a spread of 1.86%.

In the foreign exchange market, the euro is strengthening against the dollar today, as the European currency was trading at $1.0909 in the early afternoon from the $1.0859 level at which the market opened.

The indicative euro/dollar exchange rate announced by the ECB was set at $1.0905.