AUCTION PREVIEW: Portugal will seek to.....>

PORTUGAL: AUCTION PREVIEW: Portugal will seek to raise E1.0-1.25bln on Wednesday

through sales of the 1.95% Jun-29 PGB and the 2.25% Apr-34 PGB.

- BACKGROUND: The 1.95% Jun-29 PGB was last tapped on July 10 with E0.75bln sold

at an average yield of 0.51% and bid-to-cover of 1.58x. The 2.25% Apr-34 PGB was

last re-opened on June 12 with E0.63bln sold at an average yield of 1.05% and

bid-to-cover of 1.63x

- RV/HISTORY: Mirroring EGBs more broadly, Portuguese government bond yields

have pushed higher since mid-August following the sharp rally that kicked off in

July. The curve has bear steepened over the last month, while spreads over

Germany have held relatively steady. The auction comes a day before the

September ECB meeting and there is some speculation on the margins that the GC

could disappoint expectations on QE,which could underpin soft trading in EGBs.

Relative to the comparable EUR swap, the The 1.95% Jun-29 PGB trades 46bp

outside and the 2.25% Apr-34 PGB trades 66bp outside.

- TIMING: Results are due out around 1030GMT.