by Calculated Risk on 1/09/2011 06:07:00 PM

This might be an interesting week ...

From Marcus Walker at the WSJ: Portugal's Test of Debt Market Looms This Week

Portugal hopes to raise new funds in a bond auction on Wednesday ... European Union governments including Germany and France have for weeks been urging Portugal to apply for rescue loans from the joint EU-International Monetary Fund bailout facility ...

the EU's deliberations over Portugal haven't reached the intensity seen ahead of the Greek and Irish rescues ... That could change quickly, however, should Portugal's borrowing costs continue to rise. Euro-zone finance ministers are set to meet Jan. 17, by which time the market's appetite for Portuguese debt should be clear.

The yield on the Portugal 10-year bond is at 7.1%.

If the bond auction goes OK, maybe yields will fall. If not, we might see the 'intensity of deliberations' increase next weekend.

Earlier:
• Summary for Week ending January 8th
• Schedule for Week of January 9th