CROSS ASSET: USD extends small losses, US Treasuries test session lows

Reuters reporting comments from REE, Spain's grid operator, says that the country's power system is "back to normal" after yesterday's mass blackouts. While the country's power network may be back and running, the issues for the gov't of PM Pedro Sanchez may just be beginning. There had been some speculation that the outages, that hit the entire Iberian peninsula as well as French regions along the border, were due to 'abnormal weather phenomena'. However, this morning the national meteorological office, Aemet, said that “During the day of 28 April, no unusual meteorological or atmospheric phenomena were detected, and nor were there sudden variations in the temperature in our network of meteorological stations,”

• REE's Eduardo Prieto says at a presser that the "preliminary assessment is that we can rule out [a] cyberattack on the power grid."
• Any sign of mismanagement by gov't agencies in relation to the blackouts could see public anger directed at the Sanchez gov't.
• Sanchez continues to govern as he has done since 2023, at the head of a left-wing minority gov't supported in an uneasy alliance by regionalist/separatist parties. Blame apportioned at the gov't could further damage his centre-left PSOE's standing (already trailing the centre-right Popular Party in polling).
• However, Spain's system of 'constructive' and 'continuist' no confidence votes (meaning a new PM must be proposed, and a successful vote does not dissolve parliament) could bolster Sanchez's chances of avoiding ouster in the immediate term while the political temperature remains high. 

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