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Expect Increased Focus On Spanish Politics During Election Run-Up

EGBS

One to keep on the radar as our political risk team note that the “inability of the conservative People's Party (PP) and right-wing nationalist Vox to reach an agreement on forming a governing coalition in the western autonomous community of Extremadura could be viewed as a harbinger of political paralysis at the national level after the upcoming 23 July general election.”

  • When it comes to wider market focus, the Spanish election hasn’t generated much noise/ interest as of yet.
  • The 10-Year SPGB/Bund spread recently showed below the February lows (in closing terms), as part of the general round of peripheral tightening, but failed to see a meaningful extension beyond there, at least partly owing to the latest leg of the hawkish ECB re-pricing in the STIR space.

Fig. 1: 10-Year SPGB/Bund spread (bp)

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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