Published:  12:15 AM, 11 October 2017

Europe cautious ahead of Catalonia independence

Europe cautious ahead of Catalonia independence The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany. Reuters

World shares ground out a fresh record high on Tuesday, making it almost 50 for the year, although Europe tread cautiously as markets waited to see whether Spain's Catalonia region would push for independence later in the day.Japan and South Korea returned from extended breaks to give Asia a lift, but the Catalan uncertainty meant it was a lower start for the euro zone's main bourses and for Spanish bond markets. Catalonia's secessionist leader Carles Puigdemont is due to address the region's parliament in Barcelona. He could ask the assembly to vote on a unilateral declaration of independence from Madrid.

It is Spain's biggest political crisis since an attempted military coup in 1981. Madrid's IBEX stocks index drooped 0.5 percent early on and it is now down almost 9 percent since May, though a sharp rise in the euro has also taken a toll. "We have not witnessed any relevant statement or signal by the separatists that would hint at a change of strategy ahead of today's discussion in the Catalonian parliament," economists at Barclays wrote. "Consequently, at this point, it seems likely that Catalan President Carles Puigdemont remains on track to announce a unilateral declaration of independence as early as today."

The euro remained resilient. It hopped to a one-week high as data showed German exports had surged in August. Traders were also still upbeat on the currency after one of the European Central Bank's German policymakers called for an end to its stimulus.

There was also help from a weaker dollar which was down for a third straight day. The dollar index, which tracks the greenback against six major rivals, dropped 0.2 percent to 93.533 and away from Friday's almost 3-month peak.It gave the Turkish lira a breather having been sent sprawling to a nine-month low on Monday after the United States and Turkey scaled back visa services. Mexico's peso hovered at its weakest in more than four months too.

-Reuters, London

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