Portuguese and Greek bond yields rise
Portuguese and Greek bond yields rise to record levels on concern they will have to reschedule debt, European stocks and US index futures declined. Portugal’s five-year yields climbed to 10.47 % while the Greek 10 year yield rose above 13 %. Credit default swaps on Greece indicated a 60 % chance of a default within the next five years. The Stoxx Europe 600 Index sank 0.6 % the S & P 500 futures declined 0.5 %.
Greek bondholders would expect to see a 50 ~70 % “haircut” on their securities if they are forced to reschedule its debt. The spread between Portuguese 10-year bonds and German bunds widened 549 basis points while the Greek-German spread increased 32 basis points.
Greek two-year yields jumped 92 basis points a total of 157 basis points this week alone. Yields on Spanish 10-year debt jumped 9 basis points, with Irish yields 13 basis points higher.
