- Created on Friday, 17 August 2012 11:52
A sharp fall in Portugal's borrowing costs has taken them closer to those of exemplary Ireland than of struggling Greece, but bond prices show investors remain sceptical it will be able to avoid a second bailout. Reuters
Short-term yields are again lower than those for borrowing over longer periods, reversing an abnormal inversion of the yield curve that lasted from March 2011 until last month and reflected investor expectation of a near-term default.
But with 10-year yields still at 10 percent, a level deemed unsustainable over the long term, analysts say Portugal will struggle to return to the bond market next year as planned and is likely to need another bailout. (continue reading on original link)