Spain’s registered unemployment fell by 22.9K in March. Market expectations had pointed to a rise of 10.3K.
The March result was 33.2K lower than expected. This indicates a sharper drop in registered unemployment than forecasts suggested.
This positive surprise in Spain’s March unemployment figures points to a healthier labor market than we anticipated. The economy is showing resilience, which could fuel consumer spending. This data gives us a reason to be more optimistic about Spanish assets.
We should consider positioning for an upward move in the IBEX 35 index over the next few weeks. Buying call options on an IBEX-tracking ETF offers a direct way to capture this potential upside. The increased economic activity should provide a tailwind for Spain’s largest companies.
This strong jobs number from a major EU economy feeds directly into the European Central Bank’s thinking. With the latest Eurozone flash CPI for March already ticking up to 2.6%, this adds weight to the hawkish side of the debate. The ECB will be less inclined to signal rate cuts at their next meeting.
A stronger European economy and a less dovish ECB are fundamentally supportive of the euro. We can express this view by looking at call options on the EUR/USD pair, which has been hovering around 1.09. This data point helps build the case against further dollar strength in the short term.
We need to stay disciplined, as we saw a similar pattern of strong data in the third quarter of 2025 that ultimately fizzled out. The market was caught leaning the wrong way when the ECB held rates steady in November 2025. Upcoming Eurozone GDP and final CPI figures will be critical for confirmation.
For a defined-risk approach, structuring a bull call spread on the IBEX 35 for a late April or May expiry makes sense. This strategy allows us to profit from a moderate rise while capping our potential loss. It’s a prudent way to play the momentum until we get the next round of inflation data.
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