Markets Take Spain’s Crackdown on Catalan Officials Calmly

Spain’s government intensified its crackdown on Catalan separatists, raiding offices and arresting nine officials on Wednesday, and investors took it in their stride.

The nation’s benchmark 10-year government bonds were steady, in line with similar securities of Italy and Germany, as traders refrained from big changes to positions ahead of today’s Federal Reserve policy decision. While Spain’s IBEX 35 was the biggest decliner in Europe, dropping as much as 0.9 percent, about one-third of that move was due to Inditex SA, which missed earnings estimates.

The conflict is hardening between the central government based in Madrid and the independence movement led from Barcelona. The Civil Guard on Wednesday raided Catalan regional government offices including the economy and social affairs departments. It was the latest response by Madrid to snuff out preparations for an illegal referendum planned for Oct. 1.

“People seem to be ignoring it, strangely,” said Nick Henderson, a sales trader at Spanish brokerage Ahorro Corp. in Madrid. “Perhaps they’ve become a bit numb to this story.”

Read more: How to Stage an Illegal Referendum on Independence From Spain

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