Moody's says election outcome may hinder structural reforms
German factory orders add to negative economic sentiment
Portuguese bonds fell for a second day, extending their slide after weekend elections handed victory to Prime Minister Pedro Passos Coelho’s coalition without giving it a parliamentary majority.
The decline saw 10-year yields jump by the most in two weeks. The bonds had rallied in the eight trading days leading up to the Oct. 4 vote, sending yields to the lowest since May. The outcome of the election was “a little ambiguous,” Eurogroup chief Jeroen Dijsselbloem said on Monday before a meeting of finance ministers in Luxembourg. Spanish bonds also slid for a second day after last week’s rally.
“We’ve had a strong rally,” said Daniel Lenz, lead market strategist at DZ Bank AG in Frankfurt. “People realize coalition talks still need to take place in Portugal. Spain is still a hot-spot for political risk, so this profit-taking could be expected.”
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