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Developments in the Greek government bond market: February 2011

11/03/2011 - Press Releases

Government bond prices fell and yields rose in the so-called “peripheral” euro area markets in February, with Portuguese and Greek government bonds recording higher losses, while German and French bond prices remained virtually unchanged. In the US market, government bonds recorded losses, particularly at the short end of the yield curve, while the 30-year bond had a positive performance.

On the electronic secondary securities market for Greek government bonds (HDAT), prices fell and yields rose considerably during February, particularly on short- to medium-term bonds. Specifically, the 3-year benchmark bond yield recorded an increase of 107 basis points (bps), to 14.27% at the end of February and the 5-year benchmark bond yield rose by 116 bps, to 14.02%. In the longer tenors, the 10-year benchmark bond yield rose by 37 bps to 11.79% and the 30-year benchmark bond yield by 19 bps to 8.84%. As a result, the yield curve steepened while remaining inverted, with the difference between the 30- and the 3-year bond yields reaching -544 bps at the end of February from -456 bps at the end of January.

The spread between the Greek and the German 10-year bond yields was 862 bps at the end of February compared with 827 bps at the end of January.

As for government benchmark bond prices, the 3-year bond price fell to 82.56 at the end of February from 83.78 at the end of January, the 10-year bond price to 69.52 from 70.97 and the 30-year bond price to 55.94 from 57.20.

Trading volume on HDAT in February rose to EUR 847 million, compared with EUR 707 million in the previous month and EUR 18.9 billion in February 2010. The daily average turnover was EUR 42.4 million in February compared with EUR 35.4 million during the previous month. Of the 635 orders executed on HDAT, 71.9% were “sell” orders and 28.1% “buy” orders.

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