The key thing to bear in mind here is that short-term Portuguese debt was already at an unsustainably high level, so the fact that yields are ripping higher this morning is both significant and not significant. It’s significant because, yes, the market is losing confidence… but already a bailout seemed inevitable.
Interestingly, Spanish short-term yields are jumping as well, as the wolfpack (remember them) eyes up its next victim.
Here’s the Portuguese 2-year. Markit’s Gavan Nolan also notes widening in Portugal’s sovereign CDS.