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Developments in the Greek government bond market – August 2010

14/09/2010 - Press Releases

Government bonds recorded strong gains in the German and US markets during August, with yields declining to historically low levels, as investors became increasingly concerned about global economic recovery. In the Euro-zone peripheral markets, government bonds had a mixed performance with bond prices in some countries recording losses (like Ireland and Greece) while in others gains (like Italy and Spain).

On the electronic secondary securities market for Greek government bonds (HDAT) yields rose significantly during August. The biggest increase was recorded in the 5-year benchmark bond yield that rose by 144 basis points (bps) to 12.02% at the end of August, while the 10-year benchmark bond yield rose by 124 bps to 11.48%. The 3 and the 30-year benchmark bond yields increased by 117 and 61 bps respectively to 12.21% and 9.26% on August 31. The yield curve remained inverted, with the difference between the 30- and the 3-year bond yields reaching -295 at the end of August, compared to -239 bps at the end of July. The daily average spread between the Greek and the German 10-year bond yields widened to 832 bps in August, from 770 bps in July, reaching 937 bps on August 31 from 756 bps on July 30.

As for government benchmark bond prices, the 3-year bond price declined to 83.19 at the end of August from 85.11 at the end of July, the 10-year bond price fell to 69.94 from 75.70 and the 30-year bond price to 53.18 from 57.00.

Trading volume on HDAT in August amounted to EUR 819 million, compared to EUR 1.5 billion in the previous month and EUR 30.8 billion in August 2009. The daily average turnover was EUR 37.2 million in August compared with EUR 66.5 million during the previous month. The most actively traded bond during the month was the 3-year bond maturing on March 20, 2012 with EUR 103 million worth of transactions. Of the 753 orders executed on HDAT, 72% were “sell” orders and 28% “buy” orders.





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