Last week, Portugal’s debt auction was a success as Portugal managed to sell 1.25 billion euros of government bonds. This auction was 3.2 times oversubscribed thus easing concerns over the potential for a financial bailout. The ECB has reportedly been aggressive Greek debt buyers.

Euro/USD rebounded and closed at 1.3388 based on bloomberg data.

However, Nuno Serafin, head of IG markets, Portugal, for IG Index told the BBC that while this is good news in the short term continued pressure could push yields further up.

“If market pressure continues and yields in the long term go to 7.5 or more, it will be difficult for Portugal to avoid asking for help,” he said. “This is expensive for Portugal. The issue though is the gap between what Portugal would get on the open market and the price they would pay to a rescue fund. This gap does not pay off in terms of the loss of international credibility for the Portugese government so the government will fight as much as it can.”