China's support of 'junk' EU bonds will create a further bond bubble as market become even more oversupplied. China/West will get higher oil price.

After the successful Portuguese bond auction, with China privately placing 1.1billion of Portuguese debt. Get ready for banks and other sovereign funds from Asia to European now attempting to tap what appears as the 'sponsored' bond market. Which means bond yields will go into hyperspace, nice job China. Please refer to Emerging economies bond bubble The indebted nations of Europe and their citizens will now be hit with a larger tab...to pay up.

MarketWatch 13/01/2011

SAN FRANCISCO (MarketWatch) -- Portugal sold 1.1 billion euros ($1.44 billion) in bonds to China in a private placement last week, The Wall Street Journal reported Wednesday on its website, citing an anonymous source. Earlier Wednesday, the Portuguese government sold 1.25 billion euros in bonds. Spain and Italy are scheduled to hold debt auctions on Thursday

But the market gift to China (and everyone else), on increased risk appetite after the Portuguese bond auction, is the oil price:

Brent crude spiked to 98.80




and West Texas Intermediate now moving closer to 93 a barrel