Bonds: Portugal sees yields down on market reassurance

Date: Tuesday 31 Jan 2012

At the close in Europe, these were yields and movements on some of the most watched countries’ 10 year bonds:

Italy: 5.95% (-14bp)
Spain: 4.97% (-7bp)
France: 3.05% (+2bp)
Germany: 1.79% (-1bp)
Portugal: 16.4% (-99bp)
UK: 1.97% (-2bp)
US: 1.8% (-4bp)

The yields on benchmark Portuguese 10 year bonds dropped 5.7% through Tuesday after the Prime Minister, Pedro Passos Coelho, reassured bond holders there was no chance they would face a haircut on their loans to his country as they do with Greece.

In Italy and Spain, yields also fell in the wake of the EU summit in Brussels yesterday which agreed stricter budgetary rules and fines for euro area countries which borrow too much money.

The US saw slightly disappointing data on consumer confidence and business activity prompting investors to seek the safety of its bonds.

Germany, meanwhile, caused something of a stir by releasing its lowest unemployment figure for 20 years (2.85m) as the division between the economies of north and south of Europe becomes ever clearer.

BS

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