Photo: pedrosimoes via flickr
Just out…Moody’s has downgraded Portuguese debt to junk, with a negative outlook.
It’s not clear how much this really means.
Portuguese and Irish debt are already trading at all-time highs, so the market certainly doesn’t have much hope in either one of them.
At this point, a ratings action on Spain or Ireland would be far more impactful.
Still, as an independent assessment of the success of the bailout so far — i.e. the prospects of the country returning to the market at some point — this is obviously not good.
The euro has turned sharply lower on the news, and equities have gone negative.