Developments in the Greek government bond market – November 2010
27/12/2010 - Press Releases
Government bonds recorded losses on international markets in November, with the exception of short-term German and French bonds. The decline in prices and the corresponding increase in yields was particularly evident in the so-called peripheral Euro-zone markets where, in many cases, yields reached their highest levels since the single currency’s introduction.
On the electronic secondary securities market for Greek government bonds (HDAT), prices fell and yields rose during November. The 3-year benchmark bond yield recorded the highest increase, by 258 basis points (bps) to 13.23% at the end of the month, while, in the longer tenors, the 10-year benchmark bond yield rose by 124 bps to 12.00% and the 30-year benchmark bond yield by 48 bps to 9.32%. As a result, the yield curve remained inverted, while the difference between the 30- and the 3-year bond yields reached -391 bps at the end of November from -181 bps at the end of October.
The spread between the Greek and the German 10-year bond yields widened, in line with the performance seen in the rest of the peripheral Euro-zone markets, reaching 930 bps at the end of November from 820 bps at the end of October. On November 9 and 16 respectively, 6-month and 3-month Treasury bills were successfully auctioned, meeting strong demand from investors, with yields of 4.82% and 4.10% respectively.
As for government benchmark bond prices, the 3-year bond price fell sharply to 82.70 at the end of November from 87.00 at the end of October, the 5-year bond price fell to 78.02 from 80.51, the 10-year bond price to 68.14 from 73.58 and the 30-year bond price to 52.90 from 55.85.
Trading volume on HDAT in November declined to EUR 926 million, compared with EUR 1.94 billion in the previous month and EUR 50.21 billion in November 2009. The daily average turnover was EUR 42.1 million in November compared with EUR 97.1 million during the previous month. The most actively traded bond during the month was the 10-year benchmark bond with EUR 211 million worth of transactions. Of the 800 orders executed on HDAT, 63.6% were “sell” orders and 36.4% “buy” orders.