Traders and analysts said the fall in Portuguese yields was likely to be shortlived with investors increasingly convinced Lisbon will have to seek a bailout as the caretaker government's borrowing costs soared at an auction of short-term funds.
Irish 10-year yields fell by as much as half a percentage point to 9.399 percent, extending this week's falls as concerns about its ailing banks abated after stress tests, helping other peripheral euro zone bonds to outperform German benchmarks.
"There's quite a lot of shorts built up in the market over the course of the last year or so... It's too early to say whether it's a shift in sentiment or just a pause," a trader said. "There literally were no buyers in the market for the last couple of months so all it takes is for a few buyers to come in and people get squeezed up very quickly."
Some traders said investors were wary of holding short positions going into the ECB meeting on Thursday where the bank is widely expected to raise interest rates for the first time since October 2008. nike mens acg sandals 2011 Uncertainty remains on how aggressively it will tighten monetary policy for the rest of the year.
Following in the downdraft of Irish bond yields, Portuguese 10-year yields fell 24 bps to 8.76 percent, slipping for the first time since March 22, when the government in Lisbon collapsed after parliament rejected further austerity measures.
With its bond yields at euro-era highs, some investors took the opportunity to snap up Portugal's high-yielding short-term paper, but funding at those levels was seen as unsustainable and only a temporary option. [ID:nLDE7350HL], buy Reebok ZigTech online
At best, it could potentially buy Portugal time until after a June 5 election, when a new government is widely seen as facing the immediate task of negotiating a bailout.
"The interest was quite attractive for investors, because in the end there is the assumption that Portugal will not be forced to restructure until 2013 and any financing problem will be covered by the EFSF," said ING strategist Alessandro Giansanti.
"It is not risk-free. Portugal is reducing the length of its debt, while it can have the same rate for the loans from the EFSF. It is getting quite dangerous for the country."
Commentaires
Il n'y a aucun commentaire sur cet article.