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Spain/Germany bond yield gap widens, Scottish referendum bid puts focus on Catalonia
March 13, 2017 / 2:29 PM / 9 months ago

Spain/Germany bond yield gap widens, Scottish referendum bid puts focus on Catalonia

LONDON, March 13 (Reuters) - Spanish government bond yields trimmed falls on Monday, pushing the gap over German peers marginally wider, after Scotland’s first minister demanded a new independence vote, raising concerns about breakaway risks in other parts of the euro zone.

Catalonia, in the northeast of Spain, has been seeking independence, and its leaders have vowed to move ahead with another referendum on secession in September.

Spain’s 10-year government bond yield trimmed falls to stand marginally lower at 1.87 percent, underperforming most of its euro zone peers. Italian equivalents were down 2 bps and Portuguese yields fell 6 bps .

The Spanish/German yield gap widened to around 142 basis points from around 140 bps on Friday.

Analysts said the move coincided with Scottish First Minister Nicola Sturgeon demanding a new independence referendum in late 2018, which at the margin was putting the focus on Spain and breakaway risks it faces from Catalonia.

“There is always a link between the Scottish referendum risks and what the region of Catalonia is doing,” said DZ Bank strategist Daniel Lenz. “And it does appear that the Scottish referendum news has had a little bit of an impact on Spain.” (Reporting by Dhara Ranasinghe, editing by Nigel Stephenson)

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