Following Emu, bond traders are scouring non-euro EU countries for the next convergence play hot-spots. Now that the main convergence-play currencies of recent times – Italy, Spain, Ireland and Portugal – are in the euro club, those non-euro countries that might join the euro over the next few years are attracting attention. Greece has emerged ahead of the UK, Sweden and Denmark as the most popular source of convergence plays.
Phyllis Reed, government bond economist at Barclays Capital, says: “The Greeks are the best value as their spreads are high – just over 250 basis points – in relative and absolute terms, and they are most likely to join the euro next.
Access intelligence that drives action
To unlock this research, enter your email to log in or enquire about access
