Greece's bonds climbed, sending 10-year yields down by the most since October, amid easing concern that a victory for the anti-austerity Syriza party in this month's elections would result in the nation leaving the euro region.
Three-year bonds rose a third day yesterday and Greek stocks rallied after Syriza's Alexis Tsipras said last week that a government led by his party would repay debt due in March and keep Greece in the currency bloc.
The latest polls put the opposition party ahead, but short of a level required for an absolute majority. Amid signs contagion from Greece is being contained, Portugal hired banks to sell 10- and 30-year bonds, a source said.
"People are more relaxed that it won't be the end of Europe if Syriza wins the elections," said Daniel Lenz, lead market strategist for the euro area at DZ Bank in Frankfurt.
"The risk of a path that would lead to a Grexit may have been a little bit exaggerated," Mr Lenz added.