SPAIN DATA: Expansionary Composite PMI For The Last 15 Months
Spain continues to assert itself as the Eurozone growth outperformer, with the composite PMI marking its 15th consecutive month in expansionary territory. The composite reading exceeded expectations at 55.1 (vs 54.8 cons, 54.0 prior), with services rebounding to 56.2 (vs 55.5 cons, 54.9 prior). This follows a weaker-than-expected manufacturing PMI earlier this week.
Key notes from the services PMI release:
- “Higher activity was closely related to rising levels of new business”…“ Panellists continued to report that market demand had improved, both at home and abroad”.
- “Firms remained suitably encouraged to take on additional staff during February, with a net increase in staffing levels again recorded and sustaining a continuous monthly growth trend that stretches back to October 2022”.
- “The economic environment is widely expected to improve in the coming 12 months”…“ Planned commercial campaigns should ensure firms are also well placed to take advantage of a hoped for strengthening of market demand”.
- “Cost pressures meanwhile continued to intensify, largely on the back of rising labour expenses”…“ Service providers responded by increasing their own output charges in February – and to a stronger degree than at the start of 2025”.
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Historical bullets
MNI: SPAIN JAN MANUF PMI 50.9 (FCST: 53.5); DEC 53.3
- MNI: SPAIN JAN MANUF PMI 50.9 (FCST: 53.5); DEC 53.3
GILT TECHS: (H5) Trading At Its Recent Highs
- RES 4: 93.87 Low Dec 16 ‘24
- RES 3: 93.64 61.8% retracement of the Dec 3 - Jan 13 bear leg
- RES 2: 93.09 High Dec 20
- RES 1: 92.93 High Jan 31
- PRICE: 92.65 @ 08:01 GMT Feb 3
- SUP 1: 91.52 Low Jan 24
- SUP 2: 91.10 Low Jan 20
- SUP 3: 89.68/88.96 Low Jan 15 / 13 and the bear trigger
- SUP 4: 88.87 2.764 proj of the Dec 20 -27 - Jan 2 price swing
Recent gains in Gilt futures continue to highlight a corrective phase and signal scope for a continuation higher near-term. Last week’s high print reinforces current conditions. The contract has traded through the 20-day EMA and the focus is on 93.09, the Dec 20 high. The bear trigger has been defined at 88.96, the Jan 13 low. Initial support is at 91.52, the Jan 24 low. Medium-term trend conditions remain bearish.
GILTS: Opening Rally Fades Alongside Tsys
Gilts initially open higher before the recent downtick in Tsys makes itself felt.
- Futures trade as high as 92.84 before easing back to ~92.55.
- Bullish corrective cycle within a longer-term bearish technical trend remains intact.
- Last week’s high was pierced on the open, next meaningful resistance above at the Dec 30 high 93.09.
- Initial support at the Jan 24 low (91.52).
- Yields flat to 2bp higher, curve a touch steeper.
- UK paper happy to maintain higher beta to Tsys than EGBs, given recent trends and perceptions surrounding higher odds of fresh U.S. tariffs being imposed on the EU vs. the UK.
- 10-Year Gilt/Bund spread ~4bp wider at 211.5bp.
- Trump-driven tariff headlines dominate, see previous bullets for greater colour there.
- GBP STIRs roughly in line with levels we flagged ahead of the gilt open.
- Widespread consensus looks for a 25bp cut at this week’s BoE decision, which should leave focus on the forward-looking elements.
- We look for cuts this week and in May.
- Expect our full preview to be released tomorrow
