piraeus bank group

Greek Fixed Income Monitor - August 2015

As expected, Greek bond prices and yields have exhibited unprecedented volatility over the past 2 months due to the rapid and unforeseen political and economic developments.
In particular:

  • The two consecutive credit rating downgrades in the period in May and June, reduced the Government Bond Index from 300 points on 1st May to 253 points two weeks later. In addition, the referendum announcement had a significant impact on the government bond market, with the government index losing almost 28.6% of its value within 4 days. Following the referendum outcome on 5th July, the index retreated by a further 28.7% reaching a historical low of 174.2 points.
  • The resumption of negotiations between the Greek government and creditors in mid-July as well as the adoption of measures for regaining credibility on 15th and 22nd of July led to an immediate recovery in Greek bond prices of 22.53% relative to the beginning of the month. Moreover, the agreement on a third programme between Greece and the ESM resulted in even greater momentum for bond prices, which recorded gains in August equal to 20% on a Month on Month (MoM) basis.
  • In summary, despite the large fluctuations in the majority of government bond issues, the Government Bond Index recovered from losses during the previous two months and is 12.28% higher on a Year to Date (YtD) basis.

Ηλίας Λεκκός

Group Chief Economist

All the content of the present document, including any kind of archives or files, constitutes intellectual property and is protected as such by both Greek and international law. Hence it is expressly forbidden to reproduce, reprint, copy, store, sell, transmit, distribute, publish or translate the present document, in whole, in part or in summary without the previous written consent of the beneficiary, that being Piraeus Bank. The above enjoinment does not include the storing or copying of parts of the present document in a simple personal computer for strictly personal use without any intention of commercial or other utilization and without in any way implying any relinquishment of intellectual ownership rights.