Bonds: Goldman Sachs sounds optimistic note on Greece

LONDON (ShareCast) - These were the movements in some of the most widely followed 10-year sovereign bond yields: US: 1.96% (+6bp) UK: 1.57% (+16bp) Germany: 0.17% (+10bp) France: 0.42% (+5bp) Italy: 1.41% (-4bp) Spain: 1.40% (-5bp) Japan: 0.31% (+0bp) Portugal: 2.03% (-7bp) Greece: 12.71% (-91bp) Constructive remarks on Tuesday from Greek finance minister Yanis Varoufakis, together with similar statements from Eurozone officials, finally elicited a reaction from financial markets on the next day.

Possibly helping things along, on Wednesday afternoon economists at Goldman Sachs (NYSE: GS-PB - news) reportedly issued a note on Wednesday afternoon in which the bank predicted that Greece and its international creditors would able to thrash out a last-minute agreement without the country having to miss any of its debt payments to the International Monetary Fund.

Goldman further predicted the European Central Bank would extend funding to Greek banks.

All of the above saw a sharp downswing in Eurozone periphery bond yields, led by Greece, while those in core countries snapped higher.

A less dovish set of minutes of the Monetary Policy Committee's last rate setting meeting provided an additional boost to yields in the case of Gilts.

The minutes revealed that the MPC (KOSDAQ: 050540.KQ - news) was now less worried about the risks of deflation and strength in the currency.

It is against the above backdrop that the latest set of US housing data was released.

Existing US home sales grew by 6.1% month-on-month in March (consensus: 4.89m), easily outpacing economists' forecasts.

According to the FHFA US house prices increased at an 0.7% month-on-month pace in February (consensus: 0.5%).