Kathleen Brooks who is associated with Ferox. com said that when the market thought that the officials of the euro zone had the problem under control and that the euro would soon resume its upward trend the sovereign debt problem had once again came up to smash any such recovery chances. The return on the ten year Portuguese bonds rose to great heights which actually forced the European Central Bank, which temporarily stopped the bond buying policy in the last month, back to the money market to buy the Lisbon papers.
The European Central Bank had already sent warnings to the country of Greece and Ireland who have managed themselves a bail-out unlike Portugal that they should not default on their debts or impose any kind of Penalty on senior Bondholders. Mrs Brook said in response to such warnings that the investors won't get fooled by this as they will quite clearly see the chances of them defaulting fairly high. She added that The European authorities are trying to dismiss fears about the above mentioned prospects to gear up the market instead of taking any action or coming up with any such mechanism that can handle the default. This attempt by the European bank is actually causing jitters in the market.
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