España: PIB segundo trimestre crece al ritmo más fuerte de 9 años

While US GDP today is going to be enormously important in driving narratives for the investment community, we think the Spanish GDP release today is far more significant. Growth came in on-expectations, +3.1% YoY on +1% QoQ growth in Q2. Spain is surging ahead of other large European nations in terms of growth. This is important. As we mentioned last week, Spanish unemployment is still extremely high but is flat out collapsing, and output is now confirming the more consistent…or dare we say flat out impressive growth in the country. While unlikely, it’s not impossible that we’ll see 4-handle YoY GDP in Spain at some point over the next year given the tailwinds of the incredibly weak EUR and robust reform implementation in the country. With growth rising and unemployment falling, it’s also less likely we’ll see increasing popularity of Podemos (the Spanish version of Greece’s Syriza). This is positive for European financial markets stability. In terms of market reaction, SGBs are trading tighter to bunds on the print, but only in-line with broader peripheral bond markets and the European corporate credit markets. The IBEX 35 is actually weaker on the day, the only major European index in the red, driven by weak trading on a few earnings results that are not related to Spanish growth, in our view. Looking at the political dynamic, it’s also striking how strong the country’s growth and momentum has been relative to France or even Germany; this shift in economic power (at least relative to the last few years) is a very welcome one.

Fuente:Bespoke