JPMorgan: Greek bonds passed the convergence test – Investors are in a repositioning phase
- Written by E.Tsiliopoulos
In a market where the main issue is no longer risk-taking but yield management, JPMorgan is repositioning itself towards Greek government bonds, recognizing the convergence path that has already been traveled. In the latest Global Fixed Income Markets Weekly, the American house reflects a more cautious stance, recommending profit-taking in the overweight position in the 10-year Greek bond against Spain, as it estimates that the relative advantage has been largely built into prices.
This approach does not constitute a negative revision for Greece, but is part of a more comprehensive strategy for the Eurozone, where JPMorgan believes that the catalysts that could lead to a new, sharp change in the yield curve are absent. The house estimates that the European Central Bank remains in a wait-and-see attitude in the immediate term, with markets moving more within a range and focusing on carry and relative value strategies.
In this context, Greek bonds are now seen as securities that have completed most of their investment upgrade. The recommendation to take profit on the 10-year against Spain reflects the view that the spread compression that it characterized in the previous period no longer offers the same attractive risk-return profile.
At the same time, JPMorgan continues to emphasize the importance of technical factors in the government securities market. The firm emphasizes that new Eurozone bond issues continue to offer investment opportunities, due to the usual strengthening of valuations after the completion of syndications. This strategy concerns eurozone government bonds as a whole and places Greece in the same analytical framework as the rest of the zone countries, an element that reflects the institutional normalization of the Greek market.
Particular importance is also given to the structure of demand. JPMorgan’s analysis, based on data from the EBA’s 2025 transparency exercise, shows that Eurozone banks remain net buyers of sovereign bonds. Despite the maintenance of a home bias, there is a gradual strengthening of dispersion across Eurozone countries, a development that supports liquidity and limits the risks of sharp fluctuations in yields. In this environment, Greek bonds are part of a broader framework of stable bank demand for euro securities.
JPMorgan’s conclusion is clear but measured. Greece is no longer seen as a special-case market, but the phase of aggressive outperformance seems to be over. At a time when investor interest is shifting from convergence to selective positioning and profit management, Greek bonds maintain their role as a stable, but no longer “unidimensionally attractive” tool in Eurozone portfolios.
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