Spanish Political Risk Could Exacerbate Eurozone Bond Selling
Dow Jones
Oct 05
1500 GMT - Political risk in Spain after snap elections were called could add to selling in eurozone government-bond markets, prompted by concerns over France's indebtedness and fragmented politics, says Aberdeen's Lizzy Galbraith in a note. "Spain has not been the epicentre of this episode, but its cost of borrowing has started to rise in sympathy with sharper moves in France and Italy." Spain's comparatively favourable debt dynamics leave its bond markets less exposed than France or Italy, however, Galbraith says. Spain's Prime Minister Pedro Sanchez called for elections next month following housing crisis protests. Ten-year Spanish government-bond yields rise 3.9 basis points to 4.123%, according to Tradeweb. They hit 4.219% on Friday, the highest since December 2013.
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