Portugal’s 10-year borrowing costs fell steeply yesterday after its President, Anibal Cavaco Silva, ruled out snap elections and said he wanted the centre-right coalition to stay in place to keep the nation’s €78bn (£67bn) bailout on track. Portuguese 10-year yields dropped 0.38 percentage points to 6.24 per cent as relief sank in after the news.

“In the short term this is slightly positive for Portuguese bonds as this support for the coalition is better for market stability than the alternative,” Mathias van der Jeugt, a strategist at KBC, said.