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Developments in the Greek government bond market: June 2010

15/07/2010 - Press Releases

In June, government bond prices rose in the US market and yields fell significantly by more than 30 basis points, along the whole maturity spectrum, while modest gains were recorded in Germany. On the contrary, government bond prices had a negative performance in the rest of the Euro-zone markets, due to the increased risk aversion on the part of investors.

On the Greek electronic secondary securities market (HDAT), Greek government bond yields rose sharply during June, with the yield on the 3-year benchmark bond recording the biggest increase by 351 basis points (bps) to 11.31% at the end of June. In addition, the 10-year benchmark yield rose by 271 bps to 10.45% and the 30-year benchmark yield by 120 bps to 9.45%. As a result, the yield curve became inverted, with the difference between the 30- and the 3-year bond yields reaching -186 bps at the end of June, compared to 45 bps at the end of May. In addition, the average monthly spread between the Greek and the German 10-year bond yields widened to 647 bps in June from 514 bps in May.

As for government benchmark bond prices, the 3-year bond price fell to 84.19 at the end of June from 91.80 at the end of May, the 10-year bond price fell to 74.56 from 89.70 and the 30-year bond price fell to 52.01 from 59.75.

Trading volume on HDAT in June amounted to EUR 1.6 billion worth of transactions, compared to EUR 1.4 billion in May and EUR 27.8 billion in June 2009. The daily average turnover was EUR 71.5 million compared with EUR 69.7 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 269 million worth of transactions. Of the 1,326 orders executed on HDAT, 62.1% were “sell” orders and 37.9% “buy” orders.





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