Stabilizing trends prevail in the bond market, as after the “euphoria” that prevailed in the last days of 2023, investors are beginning to realize that – despite their expected reduction in 2024 – interest rates will remain at high levels for several more years.

It is recalled that last month the expectation of a reduction in interest rates had led to a rally in most bond markets.

It is characteristic that the yield of the Greek ten-year bond fell below 3%.

However, as the market returns to a more realistic assessment of the situation, it is realized that the zero – if not negative – interest rates that prevailed in the period 2014-2022, will be very difficult to see again.

The forward money markets, however, discount that the two largest Central Banks, the American Fed and the ECB in the euro zone, will proceed within 2024 to a cumulative reduction of their interest rates by 1.5% each.

For euro interest rates, this means that by the end of 2024 it will fall to 2.5% from the current 4%. However, it is estimated that it will not fall below 2% at least until the end of 2026.

Accordingly, for the dollar, the interest rate is forecast to fall to 3.75% by the end of 2024 and to 3% by the end of 2026.

However, Greek bonds moved lower today, the first working day of 2024, even though the return of Greece to the leading global debt benchmarks from January 1 by Bloomberg Index is expected to be accompanied by investment capital inflows.

It is recalled that according to Citigroup Greek government bonds will constitute 1.1% of the Bloomberg Euro Treasury index after its inclusion.

In the secondary bond market, today, and more specifically in the Electronic Transaction System (HDAT) of the Bank, transactions of 24 million euros were recorded, of which 15 million euros related to purchase orders.

The yield on the Greek 10-year bond stood at 3.16% from 3.06% that closed at the end of ’23 against 2.05% of the corresponding German bond, resulting in a margin of 1.11%.

In the foreign exchange market, the euro is moving down against the dollar, with the result that in the afternoon the European currency is trading at $1.095 from the level of $1.104, which opened the market.