Greek government bond yields have dipped after Fitch became the second ratings agency to upgrade it to "Single B" status, marking another milestone in the debt-laden state's slow journey away from default territory.
The ratings agency upgraded Greece's long-term foreign-currency issuer default ratings to 'B-' from 'CCC' late on Friday, citing reduced political risk and sustained economic growth.
Short-dated Greek government bond yields hit 3.25% at one stage, close to its lowest since 2009, a level hit earlier this month.
The yield on Greece's 10-year government bond dropped 5 basis points in early trade to 5.58% before trading flat.
"Greece is still a credit that is risky and volatile, but at least it's now not one step away from default but two steps away," said DZ Bank strategist Daniel Lenz.
"I think an upgrade was largely priced in so you won't see a huge amount of spread tightening - but still, it's possible that some high-yield investors would consider a small investment in Greece now."
S&P upgraded the country to "B-" a month ago. Moody's still has a "Caa2" rating on the country.
While Greece has been grappling with gargantuan levels of debt and has had to put stringent austerity measures in place in exchange for European Union funds, the country was given a boost in June when euro zone governments agreed to release $9.5billion in aid.
In addition, Greece regained bond market access last month after a three-year hiatus, selling €3 billion of five-year bonds.
Other South European government bonds have also outperformed the rest of the market today.
Portugal's 10-year government bond yield spread over Germany narrowed to 233 basis points, close to its tightest level all month.
The yield on Germany's 10-year government bond, the benchmark for the region, is up 1 basis point to 0.42%.
Most other high-grade bond yields are also up 1-2 bps on the day.
