Southern European governments are taking advantage of calm in bond markets to raise funding ahead of a closely-watched European Central Bank meeting, with Greece following Italy with a bond sale on Wednesday.
Eurozone bond yields have fallen sharply in recent weeks, on dovish commentary from ECB officials leading investors to bet that it is unlikely that the bank will 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.
Greece, the bloc’s most indebted state, re-opened an outstanding 10-year bond via a syndicate of banks on Wednesday.
It follows Italy, which raised 10 billion euros from a 10-year syndicated bond sale on Tuesday, receiving 65 billion euros of demand.
Italian bonds rallied strongly in the aftermath of the deal, a sizable offering with the potential to put pressure on the market. Benchmark 10-year yields fell to their lowest since May 7, suggesting the market had little struggle absorbing the paper.
The new bond itself traded up in price terms in the secondary market on Wednesday, in further evidence of strong demand.