EU and Greece appears to be nearing an agreement - BBH

According to the analysts at BBH, the EU and Greece appears to be nearing an agreement that will free up another payment tranche that will allow Greece to make a large debt payment to its official creditors that comes due in a few months.  

Key Quotes

“Greece's 10-year bond yield fell 19 bp to 6.86% last week.  The yield peaked two months ago near 8.10%.  It began the year near 7.10%.  However, one key piece of the puzzle is missing:  the IMF.”

“The IMF's role is important because both the German and Dutch parliament say it is a prerequisite for their continued participation.  The IMF has come under criticism from many of its non-European members, including the US, for overruling its own internal policies and overexposing the multilateral lender to Greece.  The US continues to enjoy a sufficiently large quota (votes) at the IMF to be able to veto a commitment of new funds.”

“Blocking the IMF from participating in new lending to Greece could come at an awkward time for Germany, given the national election in less than six months.  Also, while there is awareness of the French presidential contest, few have focused on the legislative election in June.  Neither of the leading candidates (Macron and Le Pen) commands a bloc in the current legislature.  The French premium over German is elevated even if stable in recent weeks, but it is likely to persist for much of the second quarter.”