Greek 10-year bond yields surge on political uncertainty

Yields on 10-year Greek government bonds were surging higher in later morning trading on Thursday as international capital markets continued to react to a perceived increase in political uncertainty in the Mediterranean country.

On Tuesday Greek officials proposed an early exit to the country's international bail-out programme. On the one hand, there are worries about Greek lender's ability to fund themselves without the support of the European Central Bank. However, there is also concern that Athens might be attempting to lay the groundwork before backtracking on its commitments to economic reforms.

All of the above comes in the run-up to the February presidential elections, with some brokers citing the resulting heightened political uncertainty.

As of 11:36 yields on 10-year Greek government bonds were to be seen higher by 108 basis points to 8.94%.

The Gilt market however is calm today, with the yield on 10-year government debt higher by only 1 basis point to 1.96%.

Acting as a backdrop, the yield on 10-year Spanish government debt is rising by 22 basis points to 2.30%.