Spanish Pain Deepens

Spanish data this week will reveal the extent of damage wrought on the euro-area’s fourth-biggest economy as the government fights to cap a swelling deficit that is propelling the country toward requiring international aid.

Retail sales fell 11 percent in September from a year ago, the National Statistics Institute said today. Figures on public finances, consumer prices, and gross domestic product tomorrow may confirm a deteriorating economy and debt profile amid the toughest austerity in its democratic history. The Bank of Spain estimated last week that GDP fell for a fifth quarter.

The Spanish statistics onslaught will extend scrutiny by investors on the country after unemployment data last week showed a record with one in four workers jobless. The prospect of a worsening growth profile threatens to defy the government’s forecast for an easing in a slump that has now extended for five years, adding pressure on the country to apply for help.

“What we see now is that the economy is worsening,” said Yannick Naud, a London-based portfolio manager at Glendevon King Ltd. who helps oversee $163 million in assets. “We have seen a sharp reduction of the 10-year bond yield which is not warranted by the economic situation, it has only occurred because of the threat of intervention by the European Central Bank.”
Spanish Bonds

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell