LONDON, Nov 7 (Reuters) - Portuguese bond yields fell on Monday, outperforming their euro zone peers after the Socialist government won approval for the 2017 budget with support from two far-left allies.
The budget, approved late on Friday, aims to slash the budget deficit to 1.6 percent of GDP from 2.4 percent this year.
No announcements on bond auctions for this week also helped boost sentiment towards Portuguese bonds, analysts said. Bond yields often rise in anticipation of new supply.
Portugal's 10-year government bond yield fell as much as 4 basis points to 3.25 pct, outperforming Spanish and Italian bond yields which nudged higher. (Reporting by Dhara Ranasinghe; Editing by Toby Chopra)