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LONDON, May 27 (Reuters) - Yields on Greek bonds fell and European shares extended their gains on Wednesday on the prospect of an accord between Greece and its creditors.
A Greek government official told Reuters that the Brussels group of Athens' official creditors had started procedures to draw up a staff-level agreement.
Greek 10-year government bond yields fell 42 bps to a day's low of 11.49 percent and the euro came off a one-month low against the U.S. dollar, trading up to $1.087 .
The FTSEurofirst index of European shares extended gains to trade 1.1 percent higher while an index of Greek shares was up 3.5 percent. (Reporting by London markets team, Writing By Francesco Canepa; editing by Emelia Sithole-Matarise)