Markets Eye Portugal as Other Shoe Drops

Steve Kanaval |

Bonds always move first, and logical reasoning keeps traders eyes on how Portugal soft sells a need for reform as Portuguese leaders meet European Ministers. The concern on North American soil is we get a replay of the Greek calamity with banks closed and pensioners unable to access money freezing the economy and a long drawn out sword fight which ends in bailout.

Flashing back to those Greek days everyone raised concerns that Portugal was the next shoe to drop and today we are seeing signs of that shoe dropping.

Portuguese Minister Marques speaks in Lisbon today and said he is worried about the move in Bond prices and says he will do everything to prevent budget risks. Meanwhile, European leaders counter asking Costa to steer clear of reform.

“The European Commission didn’t reject the budget but signalled that it had risks,” Portuguese Prime Minister Antonio Costa says in comments broadcast by TV station SIC Noticias. "We will do everything in the execution of the budget to prevent the risks and for confidence to return,’’

Costa says, his government is calm and confident. Portugal’s 10-Year yield reaches highest since end of bailout.needs to prepare to tighten budget. Portugal 2 Year Note yield almost doubled today, up 46 basis points at 1.138%; their 10 Year Note yield is 3.995%, up 31 basis points today.

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