- Spain’s second general election in six months did not end the fragmentation of the political landscape
- Mariano Rajoy’s Partido Popular won 14 seats and extended its lead over the other parties, but forming a stable coalition remains problematic…
- … implying that new elections remain an option
- Spain could be one of the first countries that will be fined by the European Commission for overshooting its deficit target
- Despite the relief yield spread compression in the market, we expect that the political risk premium in Spanish government bonds is likely to persist
- Spanish bonds will remain vulnerable during bouts of risk aversion
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