Investors piled into southern European government bonds Friday morning, as increased hopes for a Greek bailout deal calmed fears over contagion. The Greek government late Thursday submitted a new reform proposal to the eurozone, which appeared to moved closer to creditors’ demands. The yield on 10-year Italian government bonds fell 9 basis points to 2.072%, while that for 10-year Spanish paper lost 11 basis points to 2.055%, according to electronic trading platform Tradeweb. Yields fall as prices rise. As part of the risk-on sentiment across the eurozone, investors sold off safe-haven German government bonds , with the 10-year yield climbing 9 basis points to 0.819%. Greece’s bond market remained suspended for trade on regulated platforms, but indicative prices showed 2-year borrowing costs plunged 17 percentage points to 37.518%. The 10-year yield in Greece shaved off 4 percentage points to 14.443%.
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