AUCTION PREVIEW: The Portuguese Debt.......>

PORTUGAL: AUCTION PREVIEW: The Portuguese Debt Management Office will tap the

market for E0.75-1.00bln on Wednesday. On offer are the 1.95% Jun-29 PGB and the

4.10% Apr-37 PGB.

- BACKGROUND: The 1.95% Jun-29 PGB is the 10-year benchmark which was last

tapped on March 13 with E0.85bln allotted at an average yield of 1.30% and

bid-to-cover of 1.6x. The 4.10% Apr-37 PGB is the 20-year benchmark which was

last re-opened in 2016. 

- RV/HISTORY: Mirroring the broader euro area, the Portuguese sovereign curve

has progressively flattened since October as the global economic outlook has

darkened and the regional slowdown in industrial activity has intensified.

Spreads with core EGBs have also narrowed with the 10-year Portuguese-German

bond spread falling to 123bp from 162bp on January 3. The 1.95% Jun-29 PGB

trades at a yield of 1.207%, 70.3bp outside the comparable EUR swap and marking

a fresh yield low for the year. The 4.10% Apr-37 PGB trades at a yield of 1.952%

down from a YTD high of 2.663% in January and 120.4bp above the EUR swap.

- BACKGROUND: Results are due shortly after the auction closes at 1030BST.