European government bonds recorded further gains during November with yields falling to historically low levels while in the US bond yields rose. Several factors led to this significant decoupling of Euro-zone and US interest rates. The developments in the foreign exchange market where the unrelenting decline of the USD with respect to the Euro (as well as other currencies) started raising concern about the negative consequences for the Euro-zone economy. The economic data released during the month, which was relatively strong in the US whereas in the Euro-zone it showed a moderation of growth.

Finally, the 25 basis points interest rates increase by the Fed on November 10, in line with its recent monetary policy stance.

Greek government bonds trading on the electronic secondary securities market (HDAT) had a positive performance in line with the rest of the Euro-zone. Benchmark bond prices rose between 19 and 227 basis points (bps). The 20-year benchmark bond (maturing on 22/10/2022) recorded the highest price increase closing at 118.2 (with a yield of 4.41%) on November 30 from 115.93 (4.58%) at the end of October. The 10-year benchmark bond price (maturity 20/5/2014) rose to 104.43 (3.92%) at the end of November from 103.31 (4.07%) on October 29. The average monthly 10-year yield spread between the Greek and the German benchmark bonds declined to 16 bps from 19 bps during October. The decline resulted from the introduction of the new German 10-year benchmark bond.

Bond yields fell considerably particularly at the long end of curve with 20-year yields falling 17 bps and 3-year yields 9 bps. The spread between 3 and 20-year bond yields therefore narrowed to 179 bps from 187 bps at the end of October. Market turnover on HDAT intensified in November with respect to the previous month with traded volume raising to EUR 123.51 billion from EUR 106.52 billion in October and compared to EUR 70.07 billion in November 2003. The most actively traded bonds were once again those with remaining maturity between 7 and 10 years, which absorbed EUR 88 billion corresponding to 71% of the overall traded volume. Amongst individual bonds, the most actively traded was the 10-year benchmark that recorded EUR 49.67 billion worth of transactions, followed by the 15-year bond maturing on 11/1/2014 with EUR 18.63 billion. Of the 21,217 orders executed on HDAT 55.41% were 'buy' orders and 44.59% 'sell' orders.