Spain Consumer Price Index (MoM) meets forecasts (-0.4%) in January

💡 DMK Insight

Spain’s CPI dropping 0.4% is a key indicator for traders watching European markets. This figure aligns with forecasts, suggesting inflationary pressures are stabilizing, which could influence ECB policy decisions. If inflation continues to cool, we might see a shift in interest rate expectations, impacting the euro and related assets. Traders should keep an eye on the euro against the dollar, especially if it approaches key support levels. A sustained drop below those levels could trigger further selling. But here’s the flip side: if inflation shows signs of resurgence in the coming months, it could lead to a hawkish ECB stance, which might surprise the market. So, monitor upcoming economic data closely, particularly any shifts in consumer sentiment or wage growth, as these could signal a change in the inflation trajectory. Watch for the euro’s reaction around 1.05 against the dollar for potential trading opportunities.