Spain to Trigger Suspension of Catalan Autonomy on Saturday

Spain’s government will trigger on Saturday the Article 155 of the constitution, which allows it to suspend Catalonia’s political autonomy.

This mornings special cabinet meeting was called after Catalan leader Carles Puigdemont said the regional parliament could vote on a formal declaration of independence from Spain if the central government failed to agree to talks.

Bond Spreads

Eurozone periphery government bond spreads have widened as Catalan President Carles Puigdemont says he might formally declare independence if Madrid refuses dialogue.

Moves are limited, however. Ten-year Spanish, Italian and Portuguese bond yield spreads over equivalent German bunds are by up to +2 bps wider, with the most widening in Portuguese spreads and the least in Spanish spreads. The 10-year Spanish-German spread trades at +124 bps, up +1.2 bps.

The Spanish government have confirmed to hold an emergency Cabinet meeting on Sat, Oct 21st to begin process of suspending Catalan autonomy under Article 155

The EUR (€1.1804) is currently off its intraday Euro highs and is straddling the psychological €1.18 handle.

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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