Greek 10-year Borrowing Costs Jump After The Syriza Landslide

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Greek borrowing costs jumped on Monday morning after anti-austerity party Syriza emerged as the victor in Sunday's general election in Greece. The yield on 10-year government bonds rose 23 basis points, or almost a quarter of a percentage point, to 8.733%, according to electronic trading platform Tradeweb. Far-left Syriza has pledged to put an end to austerity in Greece and renegotiate the bailout terms agreed with the country's international lenders. Economists fear that the troika of lenders -- the International Monetary Fund, the European Central Bank and the European Commission -- won't agree to softer bailout conditions, which could ultimately push Greece into a default on its debt. However, although concerns about a "Grexit" have been back on the table in the runup to the election, most people expect Greece to stay in the eurozone. "The anti-austerity vote is massive, but it could be an empty gesture as Greece in reality has little choice: Comply with the troika or leave the [eurozone]. I doubt the latter will happen [...] as the Greeks are tired of austerity but not of being European," said Steen Jakobsen, chief economist at Saxo Bank, in a note. In other countries, the bond markets were relatively quiet, with 10-year Italian yields up 3 basis point at 1.548% and Spain's 10-year yields 4 basis points higher at 1.395%.

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