Portuguese bond yields drop

Portugal has sold €2.5bn (£2.08bn) of short term debt at lower yields than the last equivalent issue.

Half the debt was sold in the form of 11 month bonds at an average yield of 4.968 per cent. The last equivalent issue was on April 6 2011, when Portugal sold 12 month bonds at average return of 5.902 per cent, just before the country requested a bailout.

The rest of today's issue consisted of three and six month treasury bills and were mainly bought by domestic banks seeking collateral.

On Friday Standard & Poor's cut Portugal's rating by two notches to a junk status BB.