Spanish Labor Surprise
This Spanish jobs number is a significant surprise, pointing to a much hotter domestic economy than we had priced in for the first quarter of 2026. The market was positioned for a continued slowdown, but this data forces an immediate rethink on Spanish-centric assets. We should be looking at buying short-dated upside calls on the IBEX 35, as the index is likely to outperform. This isn’t happening in a vacuum; Spain’s services PMI hit 56.5 last week, a high we haven’t seen in over a year. Looking back, tourism revenues for the final quarter of 2025 also beat analyst estimates by nearly 8%, suggesting the consumer has remained remarkably resilient. This trend makes us more confident in bullish positions on consumer and banking stocks like Banco Santander and IAG. The data looks even more potent when we contrast it with the persistent weakness we’ve seen from Germany. We remember how German factory orders contracted for three straight months at the end of 2025, a trend that is not yet reversing. This divergence supports a relative value trade, so we should consider structures that go long IBEX 35 futures while selling DAX futures.ECB Rate Path
Most importantly, this strong Spanish data complicates the picture for the European Central Bank. With the latest Eurozone core CPI print from January still stubbornly above 2.5%, this kind of national labor strength makes an April rate cut from the ECB less of a sure thing. We believe buying options that profit from interest rates staying higher for longer is now a very attractive hedge. Create your live VT Markets account and start trading now.
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