After LTRO 2, Portugal in the Crosshairs Now? After a bigger than expected uptake in the 2nd round of the ECB’s 3-year 1% loans, we want to monitor the developments in the European sovereign bond market complex for clues as to what happens next in the European theater. Italian and Spanish bond markets reacted positively with yields falling, but the problem was in Portugal where we see yields pick up strongly, as there could be fear that Portugal will be the next debt restructuring domino in Europe. Italian 10-Year Yields Drop More Than 10 Basis Points Italian bond markets enjoyed a rally following the LTRO 2 ... (full story)