Portugal Bonds Falter as ECB Running Out of Eligible Debt to Buy
- Continued deviation from ECB bond-buying rules looks likely
- Bond yields have climbed as market wakes up to lower demand
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The European Central Bank is running out of Portuguese bonds to buy.
The central bank’s holdings of Portugal’s debt are already pushing the limit set by its own guidelines, leaving it likely to buy less this year to avoid breaking those rules. That prospect has led to a selloff in Portuguese government bonds, with 10-year yields having risen almost 40 basis points since the ECB’s December meeting to hit an 11-month high last week.