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The bond market is looking at Euclid — or at least the words of the Greek finance minister Euclid Tsakalotos — whose announcement of a reform deal with its creditors has pumped up prices of the country’s debt.

The yields on Greek sovereign paper are falling this morning, as the markets welcome its deal with its creditors that opens the way for funds to be released from its €86bn bailout programme.

The yield on two-year paper fell 30 basis points (0.3 percentage points) to 6.11 per cent. Yields fall when prices rise. Ten-year bonds were yielding 6.23 per cent, down 17 basis points.

“There is white smoke . . . the negotiation is finished with agreement on all the issues,” said Euclid Tsakalotos, the finance minister, after an all-night session of talks.

The agreement covers a package of fiscal and structural reforms, including and 18 per cent cut to pension payments and the sale of publicly-owned coal-fired power plants and mines.

The government must pass the measures into law before the meeting on May 22 of the Eurogroup, one of its main creditors.

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