T-4 Months For Portugal And Counting

Portuguese 5Y bond yields just broke to Euro-era record levels at over 22.5% taking then up to the same levels at which Greece traded just four short months ago. Ironically, Bloomberg notes that:

  • *ECB SAID TO BE BUYING PORTUGUESE GOVERNMENT BONDS TODAY

which appears to be wholly focused on the short-end, as the long-end is blowing out. It also seems that many want to talk about the CDS blowing out but as we have seen time and again with Portugal (since its bond market is less liquid than the already thin CDS market), bonds are underperforming notably as real money exits in a hurry.

And while comments are plenty that Portugal is smaller and is not Greece, they have (relatively speaking) notable maturities within the next few months (EUR 10bn by May2012) that will not be able to roll in the private markets and then a large lump of over EUR 10bn in June.

Chart: Bloomberg