Greek-German Bond Yield Spread Expected to Stabilize Near Term

0634 GMT – The 10-year Greek-German government bond yield spread has reached Citi rates strategists’ target of 140 basis points and looks to stabilize there until the second election in June, the strategists write in a note. “We now expect this spread to stabilize at these levels until the second election, which reportedly could be called for 25 June,” they say. The recent spread narrowing has been driven by the market’s pricing of the possibility that Greece gets an investment grade rating soon, they say. A similar performance by the incumbent New Democracy at the second election could spur some further spread tightening in the very near-term, Citi’s strategists say. (emese.bartha@wsj.com)