Blogging from the Murcia region of Spain until early June, when I return to
the Highlands of Scotland for a few months

'Fair and softly goes far' - Miguel de Cervantes

Friday, 7 January 2011

Spanish, Portuguese bond rates rise on debt worry

Ten-year Spanish bond yields have risen today to '5.536 percent from 5.460 percent at the close of trading on Thursday'. The rates for Portugal are higher still (up to 7.161 percent from 6.957 percent). According to bond strategist at BNP Paribas bank Patrick Jacq: "We are in the same framework as at the end of 2010: the problem for these countries remains their sovereign debt. These countries have weak growth and weak inflation. Add to that high bond yields and the cocktail is explosive."

The risk of either/both having to seek assistance from the European Financial Stability Fund is growing. These fears have fed through to the stock market with Spanish bank shares dragging down (FT) the wider market. See also Bloomberg here.

Worrying times indeed.

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