Asked for a comment on the emerging situation, Peter Dattels, deputy director in the monetary and capital markets department at the IMF, would only say that his institution “hopes the situation can be resolved smoothly and in a timely manner… that’s all we have to offer on the Catalan situation”.
Following the vote on independence called by the Spanish region’s government on October 1, major banks and companies based in Catalonia have started to mull moving their headquarters elsewhere in Spain, to avoid disruption if the region becomes independent, since this would push them outside the European Union.
Debt remains resilient
Spanish government debt has remained fairly resilient following the vote. Generic 10 year Bono yields rose 18bp, but have since tightened again, and came in further following Catalan president Carles Puigdemont’s speech on Tuesday evening announcing that the Catalan government would “suspend” the results of the vote for “a few weeks”, pending talks with the Spanish government.
“The speech would appear to ratchet down tensions for the time being and markets are likely to take what stops short of an immediate declaration of independence from Catalonia as a positive,” said RBC’s European economist Cathal Kennedy in a note to clients.
A source in the Catalan finance ministry told GlobalMarkets’ sister publication GlobalCapital that it was police violence during the vote that worried markets, not the possibility of independence for the region, a view shared by few international investors.