14 blurring more than two weeks of tension

The situation is improving on the Greek market. Government bonds have registered their third consecutive increase session yesterday. The 10-year rate is relaxed more than 50 points of base since Friday (10 points yesterday), 6.14, blurring more than two weeks of tension. The relaxation also affects rates 2 years, more volatile. Tuesday, short term yield decreased by 14 basis points to 5.56. On the market of CDS (credit default swaps"), the rally also confirmed.

The price of a contract of insurance on Greek debt fell yesterday to nearly 300 basis points, its lowest level since mid-January. The premium to be paid in exchange for protection therefore is dwindling. Uncertainties are not lifted, but, clearly, the hypothesis of a next solution to the financial woes of the country are strengthened. "Press information indicating that the France and the Germany are ready to buy Greek bonds, through institutions such as the Caisse des Dépôts and KfW, provide support to the market," said BNP Paribas team.

Additional efforts

The idea of a bailout organized by the two countries in fact its path and exacerbate the expectations about the meeting in Berlin on Friday, between the Greek Prime Minister, Georges Papandreou, and the German Chancellor, Angela Merkel. The prospect of further efforts of Athens to reduce its budget deficit also calm the spirits. According to Bloomberg, the Government will announce 4.8 billion EUR in addition to compression of the deficit.

Finally, the statements of the Greek debt Agency have positively perceived by market operators. "We did not need to resort to the market in the immediate," said the boss of the Agency, Petros Christodoulou, while stressing that the country will issue debt securities when market conditions are "favourable". The Greece faces deadlines of a little over 20 billion euros in April and may. At the beginning of the year, it announced a lifting of debt in February, but, given the turbulence, it did not place.

Is the worst then passed to the Greek market It is too early to say, especially since two major appointments - 5-16 March - can still create a stir. But speculation could start to be dangerous. One of its springs is buy the CDS in the country (to pressure) and at the same time short sell Greek bonds. It's a bet down on obligations.

Ready to crack down on standard & Poor's

But if the downward trend stops and resumes rising, speculators can be found quickly in difficulty. Then, they must redeem the obligations that they had sold short in emergency. The risk for them is to do so at a price higher than that of the sale. The unwinding of such positions may already have started, on a background of decrease in the need of "protection" on the Greece.

Some strategists advise even to now buy Greek debt. Team RBS, it is interesting to position itself on the 2 Greek years against the Portuguese 2 years. "The news should go in the right direction in the coming months, except those from Standard & Poor's, which stands ready to crack down," said Harvinder Sian. "But, even in this case, note of Moody's remains the most important for the eligibility of Greek borrowings to the European Central Bank and we continue to believe that next true ads on notation should be positive."