Greek bonds are trading at the levels of French bonds, after the recent downgrading of France’s credit rating.

In the secondary market, the yield of the Greek 10-year bond closed marginally higher (3.06%) compared to that (3.04%) of the corresponding French bonds.

The downgrading of France’s credit rating by Moody’s (to Aa3 from Aa2,) combined with the political instability prevailing in the country’s political scene have caused intense concern among investors, which manifested itself today in strong pressures in the bond market.

The yield on the 10-year French bond reached 3.07% today, widening the spread against German bonds to 81 basis points.

On the other hand, the head of the ECB, Christine Lagant, today tried to calm the market concerns that had arisen last Thursday regarding the speed with which the next rate cuts will proceed, stating that the European Central Bank will cut interest rates further. if inflation continues to decline towards the 2% target, as curbing economic growth is no longer necessary;

“If the latest data continues to confirm our baseline, the direction of the move is clear and we expect further rate cuts,” Lagarde said in a speech in Vilnius, Lithuania.

He added that keeping interest rates at a “sufficiently restrictive” level was no longer justified given weak growth and modest price pressures, a hint that the next target is the so-called neutral level, which neither constrains nor stimulates the economy .

The ECB has already cut interest rates four times this year and investors are betting on even more policy easing in 2025 as inflation worries have largely faded and anemic economic growth is now a bigger concern.

In the secondary market and more specifically in the Electronic Transaction System of the Bank of Greece (HDAT), 206 million transactions were recorded. euros, of which 81 million euros were related to purchase orders. The yield of the Greek 10-year bond was 3.06% compared to 2.24% of the corresponding German bond, resulting in a margin of 0.82%.