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Portuguese bond tempers bailout fears

(SHARECAST) – Yields fell at Portugal’s much anticipated bond auction as worries that the eurozone member will follow Greece and Ireland in seeking a bailout eased.

Portugal sold Euro 599m (£498m) of 10-year bonds at a yield of 6.716 percent, down from the 6.806 percent return investors demanded at an auction in November. It sold €599m in nine-year bonds.

But Portuguese bond yields actually rose in the open market after the sale, indicating that concerns over the country’s ability to stave off a bailout have not been erased. The yield on a 10-year bond rose by nine basis points to 7.1 percent. Some analysts say anything above 7 percent is worrying.

Portugal’s Prime Minister Jose Socrates hit out at talk that the country will need a bailout as speculation that feeds the activities of market speculators. “The country is doing its job and doing it well,” he said. “Portugal will not request financial aid for the simple reason that it’s not necessary.”

 

 

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