Mimiccing last week's "stall" pump-n-dump, Spanish stock and bond markets are bid this morning following reports that a senior member of the Catalan regional government called for dialogue with Spain, saying that all of Europe faces economic damage unless a resolution is found.
As Bloomberg reports, after a weekend of mass demonstrations in favor of Spanish unity, Raul Romeva, foreign affairs chief for the separatist government in Barcelona, insisted that the door was open for talks if Prime Minister Mariano Rajoy was willing to engage.
“We need two to tango, we need the other side to be at the table,” Romeva said in an interview in Barcelona on Sunday.
“We’re always going to be at the negotiation table, but to start negotiations we need the other party to negotiate with.”
Of course, after Rajoy threatened the 'nuclear option' over the weekend, we suspect talks are the last thing on his Franco-ian mind, but for now markets are impressed with 2Y yields tumbling...
And stocks up (though showing some skepticism)...
As a reminder, Puigdemont has vowed to press ahead with his independence drive and is due to address the regional parliament Tuesday, while Rajoy pledged that “national unity will be maintained” by using all instruments available to him. That includes suspending the regional administration and sending in security forces.
“If this man unilaterally declares independence, measures will have to be taken and the government will take measures," Deputy Prime Minister Soraya Saenz de Santamaría told Spanish radio.
She said action would be taken even if the government doesn’t win cross-party backing.
"We will seek support, but the act will not be left without a response from the government.”
The leaders of the Catalan National Assembly, a civic group that led a series of massive pro-independence demonstrations and works closely with Puigdemont, vowed that today's session will see the president declare independence in a video posted on Twitter Sunday.