10 year Greek bond yields are spiking this morning (and prices therefore plunging) as trading actvity picks up in the dormant peripheral capital markets. The 2025s are downover 5pts from their last traded price back in late June with yields spiking back up toward 12.5%. This derisking comes after, as we detailed earlier [6], not only is the Greek economy collapsing [7] but while Brussels is "satisfied with the smooth and constructive cooperation with the Greek authorities and that should allow us to progress as swiftly as possible," Greek PM Tsipras is threatening snap election as rebellion within 'his' party grows.
Volume and actvity picks up in GGBs and the price plunges...
[8]
* * *
Put simply, there seems to be a very real possibility that the Syriza rebellion will gather enough steam in the coming weeks to materially derail discussions. This is then a race - Tsipras needs to formalize the new program before Lafazanis (and perhaps Varoufakis) foment enough discontent to make a meaningful push to head off implementation.
And with that, we’ll close with the following sound bites from Kathimerini which sum up the situation quite nicely.
#Tsipras [9]: we are carrying a bomb right now, let's deactivate it first, then talk #Greece [10]
— Kathimerini English (@ekathimerini) July 29, 2015 [11]
#Tsipras [9] says SYRIZA should hold party congress early September after agreement with lenders sealed in August #Greece [10]
— Kathimerini English (@ekathimerini) July 29, 2015 [12]
#Tsipras [9]: If I do not have parliamentary majority, I will have to call snap elections #Greece [10]
— Kathimerini English (@ekathimerini) July 29, 2015 [13]
