The European currency is strengthening throughout the market: paired with the dollar, pound, franc, and yen, the euro feels confident, demonstrating an upward movement. Macroeconomic reports went into the background and traders completely switched to political events. At the head of the events is Catalonia, where they held early elections to the local parliament today. The results of this plebiscite will either support the growth of the European currency or will become a catalyst for the decline.
In general, today's Catalan elections are primarily an indicator of separatist sentiment among the inhabitants of the region. The turbulent political events of recent months have certainly influenced the general position of the Catalans. Some were convinced of the fidelity of the course of separating the region from Spain. Meanwhile, others are on the contrary and became disillusioned with the actions of Carles Puigdemont and his supporters. Preliminary polls could not determine the favorite of the pre-election race. Sociologists note only a decrease in support for separatists but these studies can not be called objective. According to political experts, Puigdemont was far from all in Catalonia when he publicly declared his separatist position. This is because Puigdemont is on the run and is facing criminal prosecution. However, even with this factor in mind, the number of supporters of Catalonia's separation from Spain remains impressive.
What is necessary here is to subtract the essential difference between the previous elections (2015) and today's situation. If in the year before last, the separatists went to the polls, so to speak, with a "single force" and without any contradictions with each other, now there is no unity in their camp. Moreover, the open conflict has been smoldering for several months.
Politicians have differently regarded the act of Puigdemont who fled to Belgium. Some call this a "wise decision", which will allow his continued struggle for Catalan independence from the outside. However, others called this passage a mere betrayal. Puigdemont's former associates do not see him as the general leader of the movement and this fact is reflected in the rating of both parties. The separatist movement in Catalonia is expressed by the two largest political forces: the "Democratic Convergence of Catalonia" and the "Left Republicans of Catalonia". If the leader of the first party, Puigdemont, is on the run, then the head of the second political force is forced to conduct agitation from the dungeons of Madrid's prison. It is very likely that the electorate of these political forces will be "fragmented" and both parties will show a rather weak result, at least weaker than in 2015.
This suggests that the supporters and opponents of the independence of Catalonia are likely to get an equal result. Without an absolute majority, political forces will have to negotiate. Given the existing disagreements in the "separatist wing", it will not be easy to do so. When implementing such a scenario, the probability of holding a repeated referendum for independence is very small.
There is also an alternative scenario, which will be most favorable for the European currency. According to some sociologists, the centrist party "Citizens" can surprise with its result, as it takes the most balanced position. On one hand, they uphold the territorial integrity of Spain but on the other hand, they support the autonomy of Catalonia with maximally expanded powers. For "wavering" Catalans this is the most optimal political choice.
After all, it is important to remember that after the high-profile events of this year, the Catalans have been under "information pressure". Loyal Madrid media talked about the prospects of economic collapse of independent Catalonia in bright colors. The scandalous Brexit process has been cited more than once with the only difference being that Catalonia will not initially be recognized as the subject of negotiations. The consequences of this scenario are unemployment, a decrease in investment attractiveness, a level of salaries, and so on.
In this context, the "Citizens" party occupies a convenient electoral niche according to the forecasts of experts of the BBC channel. This political party can get the maximum number of votes.
From the point of view of the foreign exchange market, any numerical superiority of the European integration forces will be received with great optimism. By and large, this fact will remove the political tension in this region, at least in the near future.
Thus, today all attention is focused on the first results of exit polls, which will be known already this evening. In the meantime, we expect a high turnout with people standing in line for 15-20 minutes to cast their vote. What course will the Catalans choose? We'll find out in a few hours.