In the early period of the week investors were demanding higher yields for holding 10-year Portuguese bonds over the German bund , because uncertainty increases as look like Moody’s was making primary grounds for Portugal to go for bail-out . In Wednesday Portuguese prime minister said that he would ask for financial support from EU and Mr. Trichet confirmed that they will encourage Portuguese authority to ask for support . This type of situation reflects that
is just one step away from bail-out fund . Portugal
Some good news for
Spain as IMF sees not rescue help is needed for . I think their decreasing bond yields show the reason . Spain
On the other hand due to increase in interest rate in EURO area and other causes Treasury yields are effected .
Long term treasury yields have increase much . 0.84 is acting as a resistance for 2-year treasury yields. Unless it crosses 0.85 it is hard to say any up further up move . For 5-year 2.32 is a resistance and unless it crosses 2.40 it is hard for any up move .
There were some resistance at around 3.50 for 10-year treasury note and it broke it now it time to see if it crosses 3.75 convincingly . Around 4.65 , 30-year Treasury is facing resistance and it may come down from here but things will be different if it crosses 4.75 level .
In the initial day investor & trader in Treasury market were little bit confuse , because of confusion about economic stimulus and interest rate increase . Next week Treasury is going to sell bond , notes , and bills worth $128 billion .
Japanese bond of around 7-year , was relatively cheap in comparing to other maturities , which attracts some foreign hedge funds . Japanese yield is heading higher due to speculation of issuance of new bond as investors are guessing from the comment of prime minister .
German bund fell for 3 weeks in a row , as it’s 10–year yield increases with other problematic countries like
Greece and . Portugal
10-Year Portuguese bond yields rose 518 basis points over German bunds . Let compare others with German bunds ,
Greece is 938 basis point , Spain’s spread decrease to 178 basis point and ’s spread reaches to 577 points . Ireland
So may be
Portugal is in trouble now , but is worse . They may need more help from rescue fund . Greece
NOTE : Please see the disclaimer below this blog .