Strong price perfomance of the Greek government bonds in July 2001
06/08/2001 - Press Releases
During the month of July the prices of the Greek government bonds
continued the recovery seen in June in line with the generally positive climate in
international bond markets. Trading activity in the Electronic Secondary Securities Market
(HDAT) slowed down slightly due to the summer period with the turnover declining to EUR
19,211 million from EUR 21,127 million in June.
The long end of the yield curve saw particularly strong gains with
prices surging between 127 and 191 price basis points in the 10y-20y maturities. This
positive performance was favoured by continued evidence, during the month, that the
international economic slowdown is not yet reaching a halt. Therefore, international
markets are expecting further interest rate cuts to come in the near future.
The 10-year benchmark bond (maturing 18/5/2011) closed at 99.86
(yielding 5.37%) on HDAT in July compared with 98.59 (5.54%) in June. The average yield
spread over the Bund widened to 49 basis points (bps) from 46 bps respectively.
The short end of the yield curve was relatively stable as the European
Central Bank (ECB) kept its monetary policy unchanged. Price gains, ranging between 4 and
58 bps, were more moderate for bonds with maturity between 3 and 7 years.
The fact that the Greek economy is growing faster than the European
average and fiscal consolidation is proceeding, combined with the established market
expectations for lower interest rates, has set the basis for these positive developments.