March 8, 2011
A small aftershock is rippling through EU bond markets these days. Today Moody’s (MCO) downgraded Greece three notches to B1, citing lagging tax collections and “implementation risks” that are increasing odds of a default event.
In general, I am not a big fan of ratings agencies, and I think they tend to be considerably behind the curve when it comes to ratings changes (and sometimes, in the wrong direction), but this serves to highlight the fact that not everyone thinks the European sovereign bond crisis is over. While it is no surprise that Greek 10-yr bonds did poorly on the news, you may not be aware that Irish and Portuguese 10-yr government bonds are also both at long-term highs today as well.
Greek, Irish, and Portuguese bonds are all near their highs in yield ... although nowhere near their highs in angst.
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