And the political pain continues in Spain.
The latest update is acting PM Rajoy has once again convoluted the road to forming a government, this time going against his word to evaluate a series of reform demands from the centrist Ciudadanos party (which if agreed to by Rajoy would increase the likelihood of Ciudadanos joining Rajoy’s party to form a coalition government). Will this political indecision continue, leaving investors in the dark?
It has been for some time. Take a look at the Spanish IBEX's performance below.
On a related note, ECB Minutes from July 21 show continued use of phrase “it [ECB] would act by using all instruments available within its mandate.” We continue to fade the ECB policy stance that QE will fix the region’s underlying growth and inflation ails. Our short bias on the EUR/USD remains intact.
***Editor's Note: The snippet above is from a note written by our Macro team and sent to subscribers this morning. Click here to learn more.