PremiumSpain Joins The Party: Snap Election Adds Madrid To Europe's "Red October" Bond Crisis
For the past week, the only question that mattered in European fixed income was whether France's fiscal meltdown would stay French. On Monday morning, Madrid volunteered an answer, or at least a new variable.
Spanish Prime Minister Pedro Sánchez called a snap general election for November 29, roughly eight months before his term was due to expire, after a fragmented parliament killed his emergency housing decrees on Friday. It's a high-stakes gamble for a Socialist leader who trails in nearly every poll, and it lands in a eurozone where the OAT-Bund spread just touched levels last seen in the 2011 debt crisis and EURUSD is sliding to a 17-month low.