The big story this morning is the.......>

EGB SUMMARY: The big story this morning is the upgrade of Portugal to investment

grade by S&P, which has helped to take the Bund-PGB spread 28bp tighter. The

move pushed Bonos/BTP yields lower and for a while even helped German yields to

decline.

- However, the German market feels heavy and there is now a small bear

steepening along the yield curve, with the 10Y yield 0.7bp higher at 0.44%, the

highest yield for around a month.

- Ireland and Cyprus also saw positive ratings announcements on Friday.

- Greek debt yields are slightly higher today as the government talks of making

fiscal bonuses to hard-hit member of the population of the better-then-expected

primary surplus.

- Eurozone final CPI data for August printed in line with the flash estimate.

There has been no other significant data.

- There have two two bond auctions this morning from Slovakia and Belgium. The

Belgian auctions were well bid and the debt agency was able to sell E3.5bln, the

top end of the 3.0-3.5bln pre-announced range.