RENEWABLES: CWE Morning Wind Forecast

Recap: Spanish March HICP inflation confirmed flash estimates at 2.22% Y/Y (vs 2.89% prior). As expected, energy (specifically electricity) inflation dragged on the headline reading, falling to 1.71% Y/Y (vs 8.58% prior). 

• Excluding energy and unprocessed foods, HICP inflation was 2.00% Y/Y (vs 2.11% prior). Services inflation pulled back two tenths to 3.11% (vs 3.33% prior). Decelerations in medical, recreation/culture services and package holidays were somewhat offset by an uptick in transport services and accommodation.
• Non-energy industrial goods inflation remains subdued, but ticked up to 0.20% from 0.02% prior.
• The proportion of ECOICOP sub-components with annual inflation rates between 1-3% ticked up to 30% from 27% in February. 

For reference, Spain represents 12% of the Eurozone-wide HICP basket in 2025.

Tomorrow we will see the national-level prints from France, Italy and Germany; our full April EZ HICP preview is here. 

Spain April inflation is due at 08:00BST / 09:00CET today. Our full April Eurozone HICP preview is here. 

• BBG Consensus:
  • HICP: 2.0% Y/Y (vs 2.2% prior), 0.3% M/M
  • CPI: 2.0% Y/Y (vs 2.3% prior), 0.4% M/M
    • Core CPI: 2.3% Y/Y (vs 2.0% prior)
• Analyst views:
  • Goldman Sachs sees HICP 2.0% headline, core 2.5%. Higher “core services component driven by travel-related, transport and other services, where we expect the rail transport component to continue to unwind the January drop and airfares to print at 2.5%mom nsa”.
    • “Energy inflation to decline to -2.5%yoy from 1.7%yoy in March, driven by a base effect and further sequential deceleration in electricity prices, and incorporating the diesel tax”.
  • Morgan Stanley also sees 2.0% headline HICP, with “energy prices to be the main driver to the downside over the month (-3.7%M) due to a steep drop in electricity prices (-6.0%M), as well as a reduction in fuels and lubricants prices (-2.9%M)”. In contrast, they expect “food inflation to pick up (+0.8%M), as is usually the case around April”, while core inflation “should also show signs of strength due to the delayed timing of Easter this year”.
    • MS “expect core HICP to pick up, reaching 2.5%Y from 2.2%Y in March, while core CPI, which includes processed food, should also rise to 2.4%Y from 2.0%Y. This is largely driven by “Recreation and Culture”, which we see rising by 1.4%M from March to April, significantly higher than last year’s print at -0.5%M.”

• RES 4: 165.43 High Nov 8        
• RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance   
• RES 2: 164.55 High Jan 7
• RES 1: 163.76/164.19 High Apr 25 / High Mar 18 and the bull trigger 
• PRICE: 162.19 @ 07:10 GMT Apr 29 
• SUP 1: 161.41/159.48 50-day EMA / Low Apr 9    
• SUP 2: 158.30 Low Apr 7 and key support 
• SUP 3: 157.02 76.4% retracement of the Feb 28 - Mar 18 bull cycle 
• SUP 4: 155.60 Low Low Mar 4 

SHort-term weakness in EURJPY appears corrective and the trend condition remains bullish. Last week’s gains reinforce a bullish theme. Key S/T support lies at 158.30, the Apr 7 low. A break of it is required to signal scope for a deeper retracement. This would open 157.02, a Fibonacci retracement. First support to watch is 161.41, the 50-day EMA. Attention is on 164.19, the Mar 18 high and a bull trigger. Clearance of this hurdle would resume the uptrend.