The Madrid IBEX index slipped 0.93% at 0830 GMT, compared to a 0.5% rise in the STOXX 600 index, while Spanish government borrowing costs edged higher. This pushed the premium investors demand for holding Spanish debt over benchmark German bonds to its highest level since December, reaching nearly 47 basis points.
* The yield on 10-year Spanish bonds remained steady, while the yield on benchmark 10-year German bonds fell 1.1 basis points to 2.764%. * "This is a strategy Donald Trump has used before against many countries, including Spain. My initial reaction was that, since the EU is treated as a single trading bloc, it will be complicated for the United States. There are some things that are very obviously Spanish (that could be targeted)," said James Rossiter, head of global macro strategy at TD Securities London. * Shares of major banks Banco Santander and BBVA fell between 1% and 2%, while smaller rivals Caixabank and Bankinter dropped over 2%. * "Spain has behaved terribly," Trump told reporters during a meeting with German Chancellor Friedrich Merz, adding that he had asked Treasury Secretary Scott Bessent to "cut all ties" with Spain. * According to data from the U.S. Census Bureau, the country recorded a trade surplus with Spain for the fourth consecutive year in 2025, totaling $4.8 billion, with U.S. exports of $26.1 billion and imports of $21.3 billion. U.S. exports of crude oil and liquefied natural gas to Spain have grown in recent years.(Reporting by Amanda Cooper and Dhara Ranasinghe; editing by Alun John; Spanish edition by Benjamín Mejías Valencia)
