The Catalan crisis will still be high on the mind of investors this week as will Brexit as a political crisis deepens in Britain. Silvia Antonioli reports.
Catalan flags waving high in the minds of investors The focus on whether separatists' leaders will defy Madrid and go ahead with a declaration of independence just a week after Catalans faced a violent police crackdown to vote for a split, in a referendum declared unconstitutional by a Spanish court But analysts say a divorce would be bad news mostly for Catalan business. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "Catalonia is fairly highly indebted and would have a relatively low rating if it were to were to secede from the rest of the country. And I guess investors would want to reduce their exposure to the Catalonia region. But you know there's no reason why they would necessarily want to dump Spanish assets on a big scale." Madrid swiftly passed a law making it easier for companies to move their base within the country. Catalan lender Sabadell has already agreed to transfer its legal base to Alicante and Caixabank is also eyeing a move from Barcelona. Eyes will also be on any progress on President Trump's planned tax cuts. Markets rose after the U.S. president proposed the biggest tax shake up in 3 decades but critics, including the Fed, warned that such move could lead to inflation and unsustainable federal debt On the other side of the Atlantic Brexit, or a delay in it, still a major story (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "We're starting the final round in phase one of the negotiations and it looks like insufficient progress will have been made in order to enable the U.K. to talk about a trade deal before the end of the year. So this this mood music will I think impact upon sterling in particular which certainly weakened a little bit over the course of recent weeks, I think largely on the back of Brexit related concerns." And the mood music for Prime Minister Theresa May might not be the most upbeat as she fends off plotters' attempts to topple her after a calamitous conference performance last week.