PORTUGAL T-BILL AUCTION PREVIEW: Portugal will tap...>

PORTUGAL T-BILL AUCTION PREVIEW: Portugal will tap the market for E1.0-1.5bln on

Wednesday. On offer are the 2.875% Jul-26 PGB and the 1.95% Jun-29 PGB.

- BACKGROUND: At the last auction of the 2.875% Jul-26 PGB in 2017, E0.61bln was

sold at an average yield of 3.95% and a bid-to-cover of 1.79x, while at the last

auction of the 1.95% Jun-29 PGB, E0.71bln was sold at an average yield of 1.57%

and bid-to-cover of 2.17x.

- RV/HISTORY: Portuguese government bonds have rallied sharply since the

beginning of the year and the sovereign curve has flattened. The benchmark

10-year yield has fallen to 1.335% from a January high of 1.818%, while the

2s10s spread has narrowed to 158bp from 206bp. The 2.875% Jul-26 PGB trades at a

yield of 0.815% down from a January high of 1.273% and 53.4bps outside the

comparable EUR swap. The 1.95% Jun-29 PGB trades at a yield of 1.337% down from

a YTD high of 1.823% and 75.4bps above the comparable EUR swap.    

- TIMING: Results are due around 1035GMT.