Portuguese and Greek bond yields rise

Thursday, 14 April 2011 03:26

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.