International bond markets were stable again in May, the Bank of Greece said yesterday, attributing this to the equity markets’ nervousness reflecting economic and geopolitical uncertainties. It said that investor expectations that interest rates would remain unchanged were confirmed by the wait-and-see stance adopted by both the European Central Bank and the US Federal Reserve at the beginning of June. The Greek government bond market had a strong turnover, reaching its highest level this year, while prices moved in line with the performance of other European bond markets. The monthly average spread of the 10-year benchmark bond over Bunds was unchanged at 34 basis points for the third consecutive month, dropping to the record low of 31 basis points during the day on May 24, 2002. Turnover on the electronic market HDAT was up at 51.53 billion euros from 38 billion euros in April and 28.03 billion euros in May 2001. The most traded bonds were those with a maturity of up to five years, which attracted 52 percent of the total turnover. From the 9,214 orders executed on HDAT, 47 percent concerned purchases and 53 percent sales. On the whole, bond prices moved within narrow ranges during the month of May. At month’s end, short- to medium-term bonds traded marginally lower, whereas long-term bonds traded slightly higher. More specifically, the three-, five- and seven-year bond prices recorded losses of two to six price basis points, the 10- and 20-year benchmark bonds gained 15 and 29 basis points respectively. Yields remained relatively stable at the levels of April. The yield curve was marginally flatter with the three- to 20-year yield spread at 125 basis points at the end of May down from 129 basis points at the end of April. The Treasury paid the price of the political problems at yesterday’s auction when it sold a net 1,446 trillion lira ($912.6 million) of three-month bills at a maximum yield of 69.64 percent.