Greek bonds are surging

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Greek bond yields are collapsing after the Bank of Greece said the European Central Bank reduced the emergency liquidity assistance (ELA)-ceiling for the country's banks by €0.1 billion to €71.4 billion.

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According to the central bank, the reduction "reflects an improvement of the liquidity situation of Greek banks amid a reduction of uncertainty and the stabilization of private sector deposit flows."

The announcement has sparked a strong bid in Greek debt, pushing the country's 10-year yield down almost 50 basis points to 10.25%, the lowest in a week.

Bonds rally when yields drop and vice versa.

greek ten year yield 2 18 16

Andy Kiersz/Business Insider, Data from Bloomberg

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Last week, Greece's 10-year yield climbed above 11.00% for the first time since August as farmers protested against the government's pension reform plans.

Greek debt will likely remain in focus over the coming days as Eurogroup President Jeroen Dijsselbloem told the European Parliament's economic committee on Thursday, pension reform and fiscal action is still necessary.

"The quality of the reforms to be implemented is our main concern, the authorities should now shift into high gear so that negotiations can be finalised as soon as possible," Dijsselbloem said.