The Greek comeback

• Greece issues bonds 
• The Fed clarifies its message 
• The euro resumes its appreciation against the dollar

Who could have projected it at the end of 2011, or even at the beginning of 2012, when the headlines were all about the Grexit? Even we, who always argued that the eurozone was here to stay with not a single member leaving, would have been doubtful that Greece could make a comeback on financial markets that soon. But it just happened: Greece issued 5- year government bonds for EUR 3 bn bearing interest of 4.95%, attracting more than EUR 20 bn of demand according to some source. The previous issue was four years ago, and the 5-year bond came with a 6.10% coupon. 

Meanwhile, in the US, there was a final correction to the feeling of hawkishness that emerged from the latest FOMC meeting, and expectations for the first rate hike are back where they were before that very meeting, a level judged by Fed officials as broadly in line with their own. 

The US monetary will, finally, stay as accommodative as thought, while the eurozone peripheral countries are more and more attractive for international investors: according to the Greek government, more than 90% of demand for its newly issued bonds came from abroad. What had to happen has indeed happened: the euro is back on strengthening against the dollar, breaking 1.38 level once more. This will not please ECB officials, but will this be sufficient to stop their procrastination? Maybe, and to that matter, the co-authored paper with the BoE regarding the ABS market, presented at the ISM Spring Meetings, will be worth a reading.