S&P downgraded Greek government bonds to junk status today and also downgraded Portugal’s debt. Meanwhile, in Germany, there appears to be continued prevarication about whether\how to help Greece. To be honest, I’m not willing to spend that much of my time following the whole Germany\Greece soap opera.
What’s more concerning, however, is that the yield on Irish government debt has jumped dramatically over the past week, with today being the worst day (chart here). The yield on ten year Irish government bond yields rose to 5.25% today with the spread relative to German bonds rising 42 basis points. At 2.3%, this spread is now not too far off the highs of about 2.5% seen last summer.