Greece has sold its first 10-year bond for nine years, in the latest sign of the ‘Goldilocks’conditions in the eurozone’s sovereign debt market.

The country, which formed the focal point of Europe’s debt crisis from 2009, raised €2.5bn of paper priced at a 3.9 per cent yield; order books topped €11.8bn.

This is Greece’s first 10-year bond issue since March 2010, weeks before it was shut out of international capital markets and forced to seek the first of three bailouts from the EU and the International Monetary Fund.

A series of blockbuster bond sales since the start of the year has bucked forecasts that demand might suffer after the European Central Bank put an end to its bond-buying programme.

The market began to thrive after January’s policy U-turn by the US Federal Reserve, which was followed by a gloomy update from the ECB, confirming to investors that global interest rates were unlikely to rise in coming months.

That is a boon for European governments with debt to sell, as investors are drawn to the additional yield on offer from longer-dated bonds.

Greece’s move comes just days after Moody’s applauded progress in repairing the country’s battered finances.

Late on Friday the rating agency lifted Greece by two notches to a B1 rating — still among the so-called junk ratings that indicate a higher level of risk, but nonetheless a sign of rehabilitation for a country now aiming to deliver primary budget surpluses every year between 2018 and 2022.

The move saw Greek bond yields fall to their lowest levels since before the eurozone debt crisis, indicating a rise in price. On Monday, the thinly-traded Greek 10-year bond yield hit a low of 3.6 per cent.

Greece emerged last August from a €86bn bailout, its third, after enduring the deepest recession on record. By then it had ventured into the international bond markets twice, raising €3bn of five-year money in July 2017 and a further €3bn of seven-year bonds in February last year.

But turmoil in the wider international markets forced the postponement of the country’s first post-bailout debt sale until the start of this year, when it raised €2.5bn in five-year debt priced at a yield of 3.6 per cent.

Christina Cho, a senior debt markets banker at BNP Paribas who acted for Greece on Tuesday’s deal, said the country’s strategy was “about returning to normality and becoming a normal sovereign issuer in the capital markets again, building incrementally over each successive issue”.

Greece was attracting a growing number of investors and more international interest in each successive debt sale, according to Ms Cho.

“They don’t have to issue til the early 2020s for financing needs — their cash buffer covers all disbursements — so the point of accessing the capital markets now is as much a confidence exercise as it is a funding exercise,” she said.

Greece’s 2019 budget provides for raising €4bn on capital markets, but the debt management agency hopes to raise as much as €7bn if market conditions allow.

BNP Paribas, Citi, Credit Suisse, Goldman Sachs, HSBC and JPMorgan acted as joint lead managers on Tuesday’s bond sale.

Services PMI 52.3 vs. prior 51.6

• and Composite 50.7 vs. 50.9 prior

• now above 50 for the 29th successive month
• sub index of new business increased to 54.5 from 52.1 in January, reaching its highest since May 2013

• lower on the manufacturing PMI (contracted at the fastest pace in two-and-a-half years)

Although the odds of a US-China trade deal have grown, at least some US tariffs could remain in place as part of a broad pact, according to Goldman Sachs.

Analysts at the investment bank predict some tariffs on Chinese imports will last into 2020, and the US could remove the levies “as various commitments under the agreement have been met.”

“In addition to longer-term reforms involving intellectual property and technology transfer, the White House also appears intent on shrinking the bilateral trade deficit with China in the near-term, potentially through purchase commitments,” Goldman Sachs said in a note to clients late Sunday.

Tensions between the world’s two largest economies have pressured global markets as investors consider the effects of tariffs on corporate earnings and economic growth. The US has imposed tariffs on $250bn worth of Chinese goods, while China has slapped tariffs on $110bn in American imports, in a dispute over trade and Beijing’s economic policies.

Reports this week suggest that US and Chinese officials are nearing an agreement that may be finalised during a face-to-face meeting between President Donald Trump and Chinese president Xi Jinping later this month. Following multiple rounds of talks in Beijing and Washington, Trump administration officials have said the two sides are moving closer to a deal. Citing progress in the talks, Mr Trump agreed to delay an increase in tariffs, extending a March 1 deadline.

“We would expect that the US would push to keep the current tariffs in effect in the near-term and reduce them only once China implements aspects of the agreement. We expect China to press for their immediate removal,” Goldman Sachs said. “Our base case is that some of the tariffs will remain in place into 2020, but the decision ultimately rests in the hands of Presidents Trump and Xi.”

Goldman’s analysts also said China “might be willing to absorb at least a $10bn annual cost through increased purchases from the US,” based on the cost of existing tariffs, as the White House seeks to narrow the country’s trade deficit with Beijing. They estimated that oil and other energy products, agricultural commodities such as soyabeans and semiconductors rank highly on a list of US exports that could get a boost.

The US also seeks greater access to Chinese services markets, and a deal may address specific areas such as financial services and cloud computing, Goldman Sachs said.

An agreement on technology transfer and intellectual property rights “could have long term benefits for US companies operating in China as well as businesses exporting to China from the US,” the group added.

Peter Boockvar, chief investment officer of Bleakley Advisory Group, noted that global markets have seemed to price in a US-China deal “many times over.”

“Assuming we’ve taken off the table this trade battle with China for now, the $64k question is the clouds parting in terms of business visibility with China trade” and whether that is “going to be enough to arrest the global economic slowdown under way,” he said.