The spread on Greek 10-year bonds fell to a new five-year low today against their German counterparts.

Specifically, at the close of the BoE’s Electronic Market (EDAT), the spread on Greek 10-year bonds was 0.42%.

President Trump’s decision to extend until July 9 the suspension of retaliatory tariffs in the EU favored peripheral bonds and higher-risk holdings in general. In contrast, German bond yields moved higher, narrowing the gap between the two.

As a reminder, US President Donald Trump backtracked on his threat to impose 50% tariffs on imports of goods from the European Union to the US. Yesterday, Sunday, he set July 9 as the deadline for reaching a Washington-Brussels trade deal.

The decision triggered a mini-rally in European markets, significantly boosting the euro which reached its highest level (1.1419) against the dollar since April 30. The retreat on the issue came after European Commission President Ursula von der Leyen assured him that more time was needed to reach an agreement.

It should be noted that the EU has already been hit by US tariffs of 25% on steel, aluminium and cars and by so-called “retaliatory” tariffs of 10% on almost all other goods, which were due to rise to 20%.

In the secondary bond market today, and more specifically in the Electronic Trading System (ETS) of the Bank of Greece, 60 million euros of transactions were recorded, of which 40 million euros were related to buy orders and the remaining 20 million euros to sell orders.

The yield of the Greek 10-year bond was 3.35% compared to 2.93% for the corresponding German bond, resulting in a spread of 0.42%.