Below shows the 10yr Portuguese bond with a histogram of the 2s10s below, there has been a sharp rise in the past few days, leading to a 150bps flattening of the 2s10s, as you can see, it is currently a long way of the 2011 inverted curve structure but still echoes those times with huge volatilty.
|PT10's and 2s10s. Reuters|
|PT10 tick. Reuters|
But what was seen on this 150bps move higher was a near 10% drop in prices as clearly some rather large funds/IB were clearing out Portuguese bonds from there books in almost a fire sale manner.
PT's CDS' are now at 395/415bps and representing a 30% chance of default over the 5 year timeframe. the Spread is merely at levels from March/April but over 100bps higher than mid-May.
|PT 5Y CDS ask spread. Reuters|
|ITDE spread. reuters|
Overall Draghi should be key tomorrow, and some further headlines from Portugal are to be expected so heads up.