The Greek market through extremes. Two days after a successful bond issue, Greek debt has yesterday been very violently heckled on the secondary market. Brussels certainly taken note of the fact that European Finance Ministers have found insufficient efforts of the country to reduce its deficit, which opens the way for the launch of the excessive deficit procedure, but this announcement is not a surprise. According to the specialists of the markets, it is especially a section of the "Financial Times" which would set fire to the powder. The British newspaper said that Athens would seek to raise 25 billion euros of debt to China. He added that Goldman Sachs was responsible for the operation.
The Greece was quick to deny this information, which have reignited fears about the inability of the country to finance on the markets and the compelling need to placement deprives some investors such as China. The amount of EUR 25 billion has shiver, insofar as it represents almost half of what the country should throw this year.
Very strong agitation
The agitation was very strong in the markets: the Greek 10-year rate is stretched basis (a movement of exceptional magnitude) 49 points 6.71. He must go back to 1999, before the euro area, to find as high financing costs. The gap with the German rate climbed to 3.52 and CDS (credit default swap") of the Greece flew to 373,5 basis points, its highest historical level. The CDS is the award of a contract of insurance against default by the Greece. Such levels of price report that the market incorporates a default next scenario of the country or exit from the euro zone. This challenge of specialists and that Jean-Claude Trichet himself has described as "absurd assumptions". Jean-Claude Juncker, the President of the Eurogroup, has also attempted to calm by stating that "the risk of bankruptcy does not exist for the Greece".
The scenario according to which the country is cornered to the private placement is also beaten in the face by the success of the bond of the beginning of the week. The Greece received a demand much greater than the supply of paper, on its titles in 5 years. Of course, the country had to pay a high price (6.1), but not all that he had been approached. In addition, operation Monday would have been essentially underwritten by end investors (who keep the papers) and not by speculators, according to a source of market.
"What was observed yesterday on the rates in 10 years looks like what is spent on the 5 years to the time the show was announced," Note Jean-François Robin, at Natixis. The market seems to push prices downward, so that the premium on the future emission is higher. In fact, the Greece has recently indicated that it intended to issue securities to 10 years in February. These violent movements seem to reflect before any strong speculation. "The low liquidity of the Greek market it in more vulnerable," says strategist of Natixis.
Some observers go so far as to compare the current situation to speculative attacks against some countries, through their currency, before the creation of the euro area. A handful of market players would thus benefit from unsustainable pressure on Greek debt to remove profits.
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