Portuguese bond spreads are widening out today after a scolding from the EU on their deficit consolidation plan. The market is now jumping into the fray, pushing their rates higher relative to German rates, trying to claim another victim.
EUR bears see Greece as the first of a series of dominoes to fall with Portugal the next most likely victim. Another spanner in the works was the report earlier today that a German economist could challenge the bailout deal in constitutional court.
EUR/USD has eased to the 1.3603 level. 1.3595 is support.
