German 10-year Bund yields plunge amid Greek drama

Investing.com - German 10-year bund yields fell sharply on Monday, after emergency bailout talks between Greece and its international creditors broke down over the weekend, pushing Athens to the brink of a debt default and possible euro zone exit.

Yields on German 10-Year Bunds hit an intraday low of 0.707%, a level not seen since June 3, before trading at 0.801% during European morning hours, down 11.9 basis points, or 12.93%.

Meanwhile, the yield on Greece's 10-Year bond surged 367.0 basis points, or 33.74%, to 14.54%, the most since December 2012, while Italian, Spanish and Portuguese government bond yields also jumped.

Markets were jittery after last ditch Greek debt negotiations broke down over the weekend, bringing the country a step closer to a debt default ahead of a looming deadline for a repayment to the International Monetary Fund on Tuesday.

Greece’s bailout is due to expire on Tuesday, the same day that Athens is due to repay €1.6 billion to the IMF, but without a rescue package in place Greece will almost certainly default.

Greek Prime Minister Alexis Tsipras abandoned negotiations with creditors on Saturday and called for a referendum to be held on July 5 on the terms proposed by lenders for extending the country’s bailout.

European finance ministers refused a request from the Greek government to extend the bailout program until after the referendum.

A Greek official said Monday that banks would remain closed for six days starting on Monday to avert a crisis in the banking sector after deposit outflows accelerated over the weekend. Withdrawals at ATM machines were to be limited to €60 a day per account.

Elsewhere, in the U.S., the yield on 10-Year Treasurys declined 12.7 basis points, or 5.11%, to hit 2.349%.

In the currency market, the euro hit lows of 1.0953 against the dollar, the weakest since June 2, and was last at 1.1061, off 0.9% for the day, while the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.5% to 96.08.

European stock markets opened sharply lower, with Germany's DAX diving as much as 5% at the open, while U.S. stock futures plunged almost 2% at one point to hit a three-month low.