Greece Follows Italy in Selling Debt ahead of ECB

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Greece receives 29 bln euros of demand for 10year tap

Follows Italy as governments seek funding ahead of ECB

Euro area yields continue to fall as dovish ECB priced in

June 9 Reuters Southern European governments are taking advantage of a fall in borrowing costs to raise funding ahead of a closely watched European Central Bank meeting, with Greece following Italy in selling debt on Wednesday.

Euro zone bond yields have fallen sharply in recent weeks, with dovish commentary from ECB officials leading investors to bet the bank is unlikely to slow its pandemic emergency bond purchases at its policy meeting on Thursday.

That has helped countries most vulnerable to a tapering of those purchases to raise funding in the market this week, to strong demand.

Greece, the blocs most indebted state, received 29 billion euros of demand for the reopening of a 10year bond on Wednesday that will raise 2.5 billion euros, its debt management agency said.

That follows a sale by Italy, which raised 10 billion euros from a 10year syndicated bond on Tuesday, receiving 65 billion euros of demand.

Investors easily absorbed the supply, with euro zone bond yields, which move inversely with prices, keeping at early May lows and continuing to fall on Wednesday as investors positioned ahead of the ECB.

Yields fell as part of a broader government bond rally that saw U.S. Treasuries rallying as well.

Market participants are in the camp that believes most of what could come out of the ECB is…

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