Portuguese interests plummet in anticipation of the 2017 State Budget

  • ECO News
  • 10 October 2016

Bond yields for national debt start off the week plunging. They stand out amongst others because of the State Budget, but also because of the decision made by DBRS.

Portuguese public debt interests start off the week falling sharply, but still keeping ten-year bonds of more than 3.5%. This sharp decline happens in anticipation to the decision made by DBRS on Portugal’s rating; the minister of Finance, Mário Centeno, believes this assessment will be positive.

The Portuguese Treasury Bond yields decreased in all maturities, specially the longer ones.

While two-year yields go down 0.9 basis points, five-year yields drop 4.8 points and decreased 6.7 basis points in ten-year maturities. Its value is now 3.554%.

Corrected ten-year debt interests

Source: Bloomberg (percentage values)


Because of these plunging numbers, Portuguese debt securities are the most relevant among the Euro Area, in spite of the challenge Portugal faces with DBRS’s rating decision – the only rating agency keeping Portugal eligible for ECB’s purchase programme.
The decision will happen on October 21st, one week after the Government should hand in the 2017 State Budget. After meeting with Canadian agency DBRS, Mário Centeno told news agency Bloomberg:

They [DBRS] say they feel very comfortable with our fiscal position, classifying it as ‘very strong’

Mário Centeno, minister of Finance