It is a bit of a surprise announcement as the general election would already be due in December. The Sunday votes were a bit of a litmus test for Sánchez and the outcome was a resounding failure for him as the conservative People’s party saw massive gains across the country.

Spain’s stock index, the IBEX, opened higher earlier in the day but has erased all of its gains now as political risks start to rear its ugly head again.

This article was written by Justin Low at www.forexlive.com.