MUFG Research flags the tightening Greek 10Y bond spread over Germany as a EUR positive factor over the coming weeks.
"The spread for Greek 10yr yields over Bunds fell to 132.7bps yesterday, a post eurozone debt crisis low and the lowest spread since October 2009. While PEPP ECB purchases have helped, Greece has not been the primary beneficiary of bond purchases. PEPP ECB data highlights the biggest over-purchases relative to capital keys were for BTPs and Spanish bonds. Still, with more QE on the way, we should expect spreads to tighten further," MUFG notes.
"Tightening periphery spreads will reinforce investor confidence and we see reduced fragmentation risks as EUR positive," MUFG adds.