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Catalonia leader calls for mandate for independence

He told Parliament in Spain that 'conflict' with authorities can be resolved in 'negotiations'

By News Desk | Published: 10th October 2017 News Updates

Spanish government bond yields held above one-week lows on Tuesday as investors awaited a speech from Catalonia's secessionist leader in which he could ask the regional government to declare independence from Spain.

Yields, which move inversely to prices, have fallen over the last couple of trading sessions on hopes that economic and political pressures may temper Carles Puigdemont's address to theCatalan parliament at 6 p.m. (1600 GMT).

Spanish bond yields were volatile on Tuesday, but held above lows hit the previous session as some investors prepared for a unilateral declaration which Madrid has vowed to respond to immediately.

In late trade, Spain's 10-year bond yield was 2.5 basis points higher at 1.70 percent, off Monday's low of 1.64 percent.

It had opened higher, fell briefly, then headed back up again, remaining some distance from six-month highs of 1.81 percent hit last week after the illegal referendum that was marred by a violent police crackdown.

German equivalents flatlined at 0.45 percent, while most other euro zone bond yields were little changed.

"It seems that the most likely path forward is one of escalation by the separatists with a declaration of independence this week," said Apolline Menut, an economist at Barclays.