Investors flee Athens and Rome for Berlin and Paris. In the early afternoon, interest rates on German and French government bonds reached a new all-time low on the secondary market, respectively at 0,554 (against 0,589% at the previous close) and 0,841% (from 0,857%).
What triggered the purchases of public bonds of the first two economies of the Eurozone, considered as safe-haven assets, was the third black smoke arrived from the Greek Parliament, which also failed in the last attempt to elect a new president of the Republic, triggering the obligation of new early political elections, scheduled for January 25th.
What worries the markets is the possibility that Syriza, now leading the polls, will win. The alternative left party led by Alexis Tsipras – while reassuring Greece's permanence in the euro – has announced its intention to re-discuss the agreements signed by Athens with the Troika in exchange for international loans. The goal is to say goodbye to austerity, considered responsible for the current social and humanitarian crisis afflicting the country.
Faced with this scenario, today the certainty of the elections led the Greek stock market to drop up to 10%, a loss which was then reduced to -4% in the early afternoon. Piazza Affari came to lose 3%, to then retrace up to -1,6%. As for government bonds, the Greek triennial is under pressure, showing an increase in yields to over 11,30%, with an increase of 80 basis points compared to the opening. The yield on five-year bonds is close to 10%, while the 8,62-year yield is little moved, at XNUMX%.
The Btp-Bund spread increased to 143bp, with the rate on ten-year Btp at 1,95%, up by 2,47%.
