Greek Bond Yields Soar And Global Market Plunge

Greek debt swap agreement will be formally implemented on Thursday, Beijing time. Although the main bond holders expressed their support for the swap agreement, market investors were not optimistic. Yesterday, the yield of Greek 1 - year bonds reached a record high of 1012.06%, which means investors are selling Greek bonds at less than 1/10 of the face value.

This pessimism permeated the global financial market. Yesterday, global stock markets sharply reversed, while the non US dollar currencies such as the euro and Australian dollar continued to plummet, while commodity prices such as gold and oil also fell.

Industry analysts said, March international market The wait-and-see atmosphere is strong and investors need to be cautious.

　　 Greek bond investors lose more than 90%

Because Greece was not optimistic about the successful implementation of the debt swap agreement, investors sold their Greek bonds at a price of less than 1/10 of the coupon price yesterday, causing Greek bond yields to soar and the yield of the one year treasury bonds to a record high of 1012.06%. This means that the actual loss of investors is more than 90%.

According to the agreement reached by the European Union, the debt swap agreement which will be implemented on Thursday in Beijing is a necessary condition for Greece to obtain second rounds of 130 billion euro aid funds. If it fails to succeed, it means that the aid plan will also be wasted, and the euro zone will probably be dragged into the crisis again.

Previously, the Greek parliament approved the bond replacement act, which stipulates that every 100 euros of Greek bonds held by the private sector creditors in the country will be exchanged for Greek bonds with a face value of 31.5 euros and a maturity of 2 euros in 2042, and a 2 year bond issued by the European Financial Stability Facility (EFSF).

　　 Greek bonds The replacement plan will involve a total of 177 billion euros of Greek government bonds. The actual loss of Greek bond investors is about 73%~74%. The minimum participation rate of the private sector creditors in the debt replacement scheme is set to 90%. Only when the participation rate is reached, can the debt replacement agreement be implemented; if the participation rate is less than 90%, but over 75%, Greece will consult with the European Union and the International Monetary Fund to initiate a collective action clause to make up for the shortfall; however, if the participation rate is below 75%, the agreement will be invalid.

Liu Dongliang, senior exchange analyst at the head office of China Merchants Bank, said that from the current market expectations, the possibility of Greek bond swap agreement could not be implemented. This will have a negative impact on global financial markets. However, the blow will not be particularly serious because the market already has expectations.

Xu Fan, a foreign exchange analyst at Bank of China's head office, also said this week focused on the implementation of the Greek bond swap agreement on Thursday and the non farm employment data in the United States on Friday night. Given the uncertainty, we must be vigilant against the failure of the Greek bond swap agreement to implement the failure of the aid plan. In addition, although the US employment data perform better, consumption pressure and investment will also weaken. Unless the Federal Reserve releases more monetary easing policy, economic growth deceleration is a big probability event, and the global financial market will be cautious about this.

　　 Impact: stock market futures slump, Euro trend bearish

Yesterday, the Greek bond prices plunged, pessimism permeated the global financial market, investors again sold risky assets to avoid risks, the global stock market plummeted, the euro and Australian dollar and other high interest currencies continued to callback, while oil and gold prices continued to fall.

Yesterday, the Hang Seng Index of Hongkong, China, fell by 2.16%. In the past two days, the Hang Seng Index dropped more than 700 points, closing at 20806 yesterday. The Nikkei index also fell for two days and began to build its head shape.

In the foreign exchange market, under the influence of hedge operations, the euro fell below 1.32 of the support, deep down, as of 6:30 last night, the euro reported 1.3138. The Australian dollar / US dollar is down for 3 consecutive days, falling below 1.06 yesterday.

　　 Bank of China head office Xu Fan, a foreign exchange analyst, said that the euro could reach 1.25 at the end of the year, and the middle volatility would be great.