Rumours flew in the market on Friday that the ECB was back to buying Portuguese government bonds.
Well, if they did, and managed to push down Portugal’s sky-high yields for a bit, it appears the yields promptly fought back:
The two-year benchmark (historic chart from Reuters above) fell from 6.3 per cent to near 6.22, only to spike to 6.38 within minutes, for example. Ditto the three-year, where yields started at 7.1 per cent, fell to 7.0 then spiked to 7.2. Both bond yields then fell even harder, to just over 6 per cent and just under 7 per cent respectively, according to Bloomberg data at pixel time.
Weird, no?
We’d be very cautious on whether this is the ECB or simply more evidence of a jittery and illiquid bond market. We’re not even too sure of the pricing data any more. All sorts of weirdness has been evident in short-term peripheral debt lately.
Still, has anyone else noticed this? Purchases (or rumours thereof) always seem to take place at the end of the week.
Bonds bought on a Thursday or a Friday take a few days to settle, which can mean that purchases don’t show up in the next weekly data, but in fact a fortnight later.
The ECB isn’t embarrassed to be seen to act, is it?
For it does all show up in the end…
Related link:
Moody’s downgrades Portugal to A3 from A1 – FT Alphaville
Portugal bond-buying estimates du jour – FT Alphaville
What fresh basis the ECB hath wrought – yet again – FT Alphaville