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Best Bonds in Euro Region Show Investors Don’t Miss a Government

  • Spain’s political deadlock proves no obstacle to market rally
  • Question is whether limbo will eventually hit the economy
Source: Getty Images

In a world where political risk occupies investors more than ever, sometimes it’s better not to have a government.

Spanish bonds have returned 3.5 percent over the last three months, the best performance of anywhere in the euro region, according to Bloomberg World Bond Indexes. There’s been parliamentary gridlock since elections in December and June produced no clear winner, yet 10-year bond yields show the country pays the least to borrow compared with Italy since January 2015.