LONDON—Portuguese bond prices plummeted and the euro slumped Wednesday after Moody's downgraded the country to junk status, disqualifying the country from an index of sovereign debt and triggering a selloff...These "fixed" crises just won't stay fixed!
The yield spread between Portuguese two-year bonds and safe-haven German two-year paper widened by more than two percentage points and the yield on Portuguese 10-year bonds rose by nearly 1.3 percentage points to 12.84%, taking the 10-year spread to Germany to over 9.8 percentage points, according to Tradeweb.
When do we start thinking about rescue packages for German banks?
* - Until next week or maybe a little later.
