- Spanish stocks sink as Catalan declare independence
- Catalan parliament votes 70 to 10 in favour of secession
- SPA35 falls close to prior support at 10090. EURUSD at 3-month low
The Catalan independence saga has had a potentially major twist this afternoon with the Catalan parliament voting strongly in favour of independence. This development represents a dramatic U-turn after Thursday saw fairly widespread reports that the Catalan President Puigdemont was set to back down on his independence push which sent the IBEX35 (SPA35 on xStation) soaring to a 30 month high.
Deputies in the regional assembly backed the motion for secession by 70 to 10 in what is a momentous decision and represents a major escalation of the biggest political crisis in Spain since the 1970s. Speaking before this act the Spanish PM Rajoy insists that the region is not independent and is in the process of taking a tighter control of the region. Rajoy addressed the Senate this morning saying that “Catalans must be protected from an intolerant minority that is awarding itself ownership of Catalonia, and is trying to subject all Catalans to the yoke of its doctrine. He also said that the government had no other choice but to adopt the exceptional measures under Article 155 of the Spanish constitution to restore law and order in the region.
The SPA35 has fallen today by almost 2% to test the prior support level at 10090. Source: xStation
It’s been a volatile month for Spanish stocks with the SPA35 seeing several large moves on the twists in the Catalan independence push. The most recent move has seen price fall back down towards yesterday’s low at 10090 which has previously acted as support on several occasions. A break below here could see the market revisit its monthly low at 9837 and if price breaks then a major decline could be in store. On the upside, 10380 is an area to watch and it is not until price breaks cleanly above there that the recent period of weakness can be seen to be over.