LIVE MARKETS-Election opportunity for Spanish bonds

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ELECTION OPPORTUNITY FOR SPANISH BONDS

While France is grappling with protests and the very real prospect of a far-left or far-right leader at next year's presidential election, Spain looks to be following a more conventional path with the centre-right Partido Popular (PP) holding a solid lead in opinion polls before November's election.

Opinion polls are consistent with a PP-Vox coalition, which would see the two parties secure a comfortable parliamentary majority and lead to a change in government from Pedro Sanchez' incumbent PSOE.

"Although a policy agenda has yet to be fully specified, a new coalition would likely act along three dimensions: accelerating debt reduction through further fiscal consolidation; removing sector-specific levies, including the bank tax; and facilitating private residential investment while pursuing tighter immigration policy," Goldman Sachs says.

They believe that Spanish sovereign debt could re-rate if the November 29 election delivers a clear majority government, i.e. investors will become more willing to accept a lower yield for holding the same bond because they view Spain as less risky or more attractive.

(Samuel Indyk)

EARLIER ON LIVE MARKETS:

EUROPEAN SHARES FALL, FRANCE UNDERPERFORMS CLICK HERE

EUROPE BEFORE THE BELL: ELEVATED OIL PRICES, RIOTING LEAVE FUTURES IN THE RED CLICK HERE

MARKETS LEFT TO FIGURE OUT SANCTIONS CLICK HERE