EUR: Catalan parliament to discuss Spanish government’s imposing direct rule

The euro slid against the US dollar and sterling yesterday as tensions between Spain and Catalonia continue. The Catalan parliament is set to meet on Thursday to discuss the Spanish government’s decision to impose direct rule. There is mounting speculation that Carles Puigdemont will reject the attempt to take control and ask MPs to vote on a unilateral declaration of independence. It is an extremely messy situation and it is difficult to see how the situation can be resolved in a satisfactory manner.

Meanwhile, there was yet more positive data for the eurozone, as consumer confidence beat forecasts for October. It is another sign that Europe’s economic recovery is continuing and one wonders whether it will influence the European Central Bank’s quantitative easing programme decision when they convene on Thursday.

Today sees the release of the German Markit manufacturing, services and composite purchasing managers’ index.