Spain could be next Greece

Spain has by far doing well among the Euro zone's troubled economies. Yields on Spanish government bonds are far better than that of Greece. Current Spanish benchmark 10 year yield is hovering around 1.62% points compare to Greece's close to 10%.

Yet the could share the same fate -

• Despite the recent growth in GDP & PMI, unemployment has been at a staggering high close to 23% and youth unemployment has fallen but still hovers above 40%.

• People will not see the betterment in economy until they have a job. This situation is similar to that of Greece.

• Like Syriza party gained in Greece and engaged in a grid lock with the European creditors, similar could happen in Spain too.

• A one year old party Podemos has tapped into people's anger and campaigning against the deterioration in quality of life & political corruption.

• Spain faces an election this year and latest poll suggest that Podemos could win as high as 28% of the vote.

• Current Spanish Prime minister Mariano Rajoy faces allegation over corruption.

So far in the Spanish bond market the risk premium for election and political uncertainty remains low but that could change fast in the coming days and even impact the Euro.

Euro is currently trading at 1.131, down 0.4% for the day.