One of the largest banks in Switzerland is avoiding euro-denominated debt, preferring real estate and US dollar assets instead as fears swirl about Greece, although it expects some kind of Greek debt deal.

As investors continue to fret on what will be the outcome of Greece’s debt negotiations with the rest of the European Union, Switzerland’s third-biggest bank is for the moment steering clear of euro-denominated bonds. It has, however, issued a relatively sanguine view on the risk of Greece leaving the euro bloc.

Markus Allenspach, head of fixed income research at Julius Baer said his strategy is to avoid euro bond market debt and invest in European real estate investment trusts and dollar-denominated high-grade bonds instead.

The analyst said that he has support for his views from the European Central Bank, which in the first-ever publication of minutes from a monetary meeting, said that the ECB’s buying corporate bonds represented better value than government bonds and would give more of a boost to the economy.

“We share the view that the euro bond market is distorted and investors will find more attractive risk/return profiles elsewhere,” Allenspach said in a note.

While Greek debt fears remain, the bank said that fears of Greece leaving the eurozone are actually declining, which should at least underpin the euro and European financial markets in the short run.

“‘After the meeting is before the meeting’ remains the theme in the euro area. Greece and the rest of the eurozone members time and again walk out of the ‘last’ negotiations only to meet again some days later,” he said.

“We maintain our baseline scenario that a compromise can be found in the last minute, which could be 28 February 2015, when the current support programme ends, or some time in March or April, when Greece is expected to run out of money. The latter point in time is hard to calculate,” Allenspach continued.

“Last year, Greece generated a primary budget surplus, but in January government revenues had declined about 25 per cent below their level of January 2014, as taxpayers seemingly slowed their payments in anticipation of a more relaxed tax collection attitude of the new government or tax cuts. With this decline in tax collection in mind, we can understand why the rest of the Eurogroup insists on strict control from the troika (European Commission, European Central Bank and International Monetary Fund) of the Greek fiscal policy implementation,” he added.