Wednesday 18 October 2017

Pain mainly in Spain as wider market shrugs off Catalan crisis

A woman carries an independence Catalan flag as demonstrators march downtown Barcelona, Spain, Tuesday Oct. 3, 2017 (AP Photo/Santi Palacios)
A woman carries an independence Catalan flag as demonstrators march downtown Barcelona, Spain, Tuesday Oct. 3, 2017 (AP Photo/Santi Palacios)

Reuters

An apology from Spain for a violent police crackdown on Catalonia's independence referendum helped settle battered Spanish markets yesterday, although global bond yields were broadly higher after a mixed US jobs report.

Spain's 10-year bond yield - which moves inversely to the price - reversed most of rise seen earlier yesterday as investors became concerned about plans by Catalonia's regional parliament to meet in defiance of a ruling by the country's main legislative court.

But the country's bonds still notched up their worst week in three months as yields rose globally yesterday after US unemployment and wage growth data showed the resilience of the world's largest economy in the face of a wave of hurricanes.

Most Eurozone 10-year yields closed flat or slightly higher on the day, including Spain's which had earlier been as much as 7 bps higher.

Spain's yields have risen 10 bps this week, marking their worst period since early July, according to Tradeweb data. Madrid's main stock index closed down 0.3pc, recovering ground from earlier in the session.

It fell 1.88pc on the week to mark its biggest drop in five weeks.

In Dublin the Iseq was down -0.66pc at 6,859.50 yesterday.

CRH was weaker after a rival emerged for Ash Grove Cement, a US company it's bidding for.

European shares generally rose for the fourth consecutive week yesterday as confidence over the region's economic recovery outweighed worries over the Catalonia crisis. Elsewhere, analysts said the poor US data increases the chances that the Federal Reserve will hike rates again later this year.

The UK's FTSE rose 0.2pc after Prime Minister Theresa May said she would stay on as leader to provide stability as Britain enters a crucial stage in Brexit talks.

Irish Independent

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