Loin of Lamb Marinated in Merlot, Garlic and Parsley with Piquillo Pepper Pesto

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1 cup Merlot

1 tablespoon fresh thyme leaves

2 tablespoons olive oil

4 cloves garlic, coarsely chopped

1/4 teaspoon coarsely ground black pepper

1/4 cup chopped flat-leaf fresh parsley, plus sprigs for garnish

1 1/2 pounds lamb loin, cleaned

Kosher salt

Sprigs of thyme, for garnish

Piquillo Pepper Pesto, recipe follows

Piquillo Pepper Pesto:

6 piquillo peppers

1/4 cup pine nuts

2 cloves garlic

1/2 cup extra-virgin olive oil

1/4 cup freshly grated Parmigiano-Reggiano

Salt and freshly ground black pepper