The yields on Portugal’s’ bonds are breaking records, above 7.5%. This can be “blamed” on the European Central Bank, that didn’t buy any bonds in the pat two weeks. Without the support of Jean-Claude Trichet, money becomes very expensive for Portugal. The high lending levels are unsustainable in the long run, and may force an intervention. At the beginning of the year, there were talks about a bailout for Portugal – a Franco-German effort to convince Portugal to take the bailout in order to save Spain from the same fate. But successful bond auctions, Chinese assistance (private auctions) and help from the ECB helped the yields come down and the pressure to lift from the small Iberian country. The next big event is the European summit in March. So, the only reason for the rise in yields is the absence of ECB bond buying. Not only does the ECB’s money send the bonds down and the yields up, but it also sends a signal to other investors, that are ditching Portugal. In April, Portugal will have a big load of debt to pay back. The EU summit in March will therefore be a critical event. The European debt issues are far from over – Greece and Ireland, which already received bailouts, are still troubled, and can still face a restructuring of debt. In the Greek case it could be the Brady plan, which offers bondholders a bet on getting paid or a safe exit with a haircut now. In the Irish case, senior bondholders might face a haircut as the new government in Ireland might take a different approach. The chances rose after a bank in Denmark made a haircut for senior bondholders. Update: Well, the ECB woke up and returned to buying bonds – yields fell from a peak of 7.63% to 7.43% at the moment. EUR/USD isn’t excited at the moment. While the pair drifted lower earlier, it’s still well within known ranges. Also Spanish bonds aren’t excited – The yields are rising also there, to 5.32%, but it’s still significantly lower from the 5.50%-5.60% levels already seen many times. See events and technical levels in the EUR/USD Forecast. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Opinions share Read Next British Rate Unchanged – Pound Bounces Off Support Yohay Elam 12 years The yields on Portugal's' bonds are breaking records, above 7.5%. This can be "blamed" on the European Central Bank, that didn't buy any bonds in the pat two weeks. Without the support of Jean-Claude Trichet, money becomes very expensive for Portugal. The high lending levels are unsustainable in the long run, and may force an intervention. At the beginning of the year, there were talks about a bailout for Portugal - a Franco-German effort to convince Portugal to take the bailout in order to save Spain from the same fate. But successful bond auctions, Chinese assistance (private auctions) and help… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.