Political Risks Re-Emerging in Europe Punish Portuguese Bonds
- Portugal's yield spread over German bunds most in four months
- Spanish bonds suffer longest losing streak since September
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The re-emergence of political risks in the euro area played havoc with the region’s higher-yielding government bonds, blunting the impact of the European Central Bank’s asset-purchase program.
Declines by Portugal’s sovereign bonds Monday pushed the 10-year yield to the highest level since July as a loose alliance of opposition parties was poised to topple Prime Minister Pedro Passos Coelho’s new government, boosting investors’ concern about political instability and plans to roll back spending cuts tied to the country’s previous international bailout.