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Developments in the Greek government bond market: July 2011

22/08/2011 - Press Releases

On the electronic secondary securities market (HDAT), Greek government bond prices rose and yields fell in July, with the exception of the 3-year benchmark bond yield that increased slightly. A positive trend in government securities prices was observed also in countries with the highest sovereign credit rating while in most of the so-called “peripheral” euro area government bond markets, prices fell and yields rose.

In particular, with regard to Greek government benchmark bond prices, the 10-year and the 30-year bonds recorded the biggest gains as their prices rose to 59.82 and 49.03 respectively, at the end of July, from 54.66 and 43.51 at the end of June. In the shorter tenors, the 3-year bond price rose to 59.00 at the end of July, from 58.90 a month earlier, and the 5-year bond price rose to 60.00 from 56.99.

As for Greek government benchmark bond yields, the 5-year yield declined by 138 basis points (bps) to 21.94% at the end of July, the 10-year yield declined by 157 bps to 14.59% and the 30-year yield fell by 118 bps to 10.06%. In contrast, the 3-year yield increased by 53 bps to 27.14% at the end of July. As a result, the yield curve remained inverted, with the difference between the 30- and the 3-year bond yields reaching the level of -1,708 bps at the end of July from -1,537 bps at the end of June.

In addition, the average monthly spread between the Greek and the German 10-year bond yields declined to 1,335 in July from 1,371 bps in June.

Trading volume on HDAT in July amounted to EUR 131 million compared with EUR 368 million in the previous month and EUR 1.46 billion in July 2010. The daily average turnover was EUR 6.2 million compared with EUR 17.5 million during the previous month. The most actively traded bond during the month was the 10-year benchmark bond with EUR 44 million worth of transactions. Out of the 111 orders executed on HDAT, 64.9% were “sell” orders and 35.1% “buy” orders.

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