Irish bonds erase advance following ratings upgrade

Yield on Irish 10-year gilts rises again following outperformance this morning

Rating agency Moody’s  changed its outlook on its Ba1 rating of Irish Government bonds from negative to stable, but did not give Ireland a credit ratings upgrade on Friday. Photographer: Scott Eells/Bloomberg

Rating agency Moody’s changed its outlook on its Ba1 rating of Irish Government bonds from negative to stable, but did not give Ireland a credit ratings upgrade on Friday. Photographer: Scott Eells/Bloomberg

Mon, Sep 23, 2013, 14:59

Yields on Ireland’s 10-year government bonds have risen again, after an outperformance this morning over euro-area counterparts after Moody’s Investors Service raised the outlook on the nation’s debt, citing stability in its access to financial markets. The gains pushed the yield on Irish 10-year securities to the lowest level in two months, as it decreased by three basis points, or 0.03 percentage points, to 3.85 per cent this morning. However, it has since climbed again, hitting 3.89 per cent at 2.30 pm this afternoon.

“The Moody’s change is only a change in outlook, they still have Ireland at sub-investment grade, but it is a positive development,” said Owen Callan, an analyst at Danske Bank in Dublin. “It reflects the adjustment that the nation has made and that’s why we’re seeing a bit of a better performance in Irish bonds.”

Germany’s government bonds fell as Angela Merkel searched for a third-term coalition partner after winning yesterday’s elections. Manufacturing and services output in the euro area expanded this month, a report showed today. Italian bonds snapped a five-day advance.

Bloomberg