Government bonds

European government-bond yields in the periphery fell this week, as Greece reached a deal with its international creditors over extending its bail-out. Yields on Greece’s ten-year bonds had climbed to their highest since July 2013, when Greece was still spooking markets following its near-exit from the euro in 2012. Unlike then, the latest bout of Greek woes has had rather limited spillover effects on other periphery countries—perhaps because markets believed Greece would reach a deal in the end, perhaps because of the European Central Bank’s promise to do whatever it takes to save the euro. Portuguese bond yields, for example, have fallen from 6.2% at the start of 2014 to less than 2% now.