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Irish, Portuguese Bonds Decline on Deficit, Political Concern

Ireland and Portugal led so-called peripheral European bond markets lower amid renewed concern that countries will struggle to cut their budget deficits.

The extra yield, or spread, investors demand to hold Irish 10-year bonds instead of similar-maturity German bunds rose to within two basis points of its euro-era record before narrowing. A group of Anglo Irish Bank Corp.’s creditors said they won’t take part in a debt swap proposed by the lender. Portugal’s biggest opposition party, which ended budget talks with the ruling Socialist Party yesterday, led the government by a wider margin in a survey of voter intentions, TSF radio reported.