Lenihan's remarks drew scrutiny for acknowledging that the government may eventually apply for rescue funds, although the official continued to emphasize that any aid package would be aimed at shoring up the banking sector rather than helping the government meet its funding needs.

...

And in fixed-income trading, Irish government bond yields declined across the curve as a result of expectations for a bailout, analysts said, while the cost of insuring Irish sovereign debt against default also fell.

Equity markets rallied, with the Irish ISEQ stock index /quotes/comstock/30q!ieop (XX:IEOP 2,765, +72.74, +2.70%)  gaining 2%. Relief spilled over into other equities exchanges in Europe. See more on the rally in European stocks.