SPAIN DATA: Modest Disinflation Expected In January Amid Energy VAT Increases
The January Eurozone inflation round begins with Spain this morning at 0800GMT/0900CET. Although the flash release contains little in the way of details, we preview today's print in the below. We will release our full Eurozone Inflation preview this morning, shortly after the Spanish print is released. Spain had an 11% weight in the overall EZ basket in 2023.
- HICP consensus (bbg): 3.0% Y/Y (3.3% prior) / -0.6% M/M (0.0% prior)
- CPI consensus (bbg): 3.0% Y/Y (3.1% prior) / -0.2% M/M (0.0% prior)
- Core CPI consensus (bbg): 3.3% Y/Y (vs 3.8% prior)
- VAT on both gas and electricity has risen to 10% (vs 5% prior), and analysts have noted additional changes to taxes on electricity and electricity generation.
- Morgan Stanley estimate the total impact of the above changes to be around +26bp to headline CPI.
- Barclays forecast a +9.0% M/M change in electricity HICP and a +4.8% M/M change in gas HICP.
- Nomura look for a smaller increase in electricity HICP (+1.0% M/M) but a +6.5% M/M rise in gas HICP.
- Core components are expected to continue disinflation, as in the other major Eurozone countries.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUSSIE 10-YEAR TECHS: (H4) Bullish Outlook
- RES 3: 96.160 - High Jul 20
- RES 2: 96.126 - 2.0% Upper Bollinger Band
- RES 1: 96.110 - High Dec 28
- PRICE: 96.035 @ 15:12 GMT Dec 29
- SUP 1: 95.390/275 - Low Nov 27 / 14
- SUP 2: 94.966 - 1.0% 10-dma envelope
- SUP 3: 94.965 - Low Oct 31
Aussie 10yr futures remain in an uptrend and the contract traded to new highs of 96.110 this week. This takes out key resistance at the 96.050 level, opening levels seen higher at the 2.0% upper Bollinger Band of 96.126. The recent recovery has tipped prices north of the 100-dma - reinforcing the current bullish theme. Key support lies below at 95.390 as well as 95.275. Weakness through here could mark the conclusion of the bounce off the bear trigger at 94.965.
USDCAD TECHS: Bears Remain In The Driver’s Seat
- RES 4: 1.3513 50-day EMA
- RES 3: 1.3391 20-day EMA
- RES 2: 1.3371 High Dec 20 / 21
- RES 1: 1.3295 High Dec 25
- PRICE: 1.3200 @ 15:25 GMT Dec 29
- SUP 1: 1.3177 Low Dec 27
- SUP 2: 1.3093 Low Jul 14 and key support
- SUP 3: 1.3044 2.0% 10-dma envelope
- SUP 4: 1.2992 50.0% retracement of the 2021 - 2022 bull phase
The USDCAD trend outlook remains bearish and price traded lower on Wednesday. The pair has recently cleared a bear trigger at 1.3480, the Dec 4 low. Furthermore, all key short-term retracement points have been breached. These developments reinforce a bearish theme and maintain the price sequence of lower lows. Sights are on 1.3093, the Jul 14 low and a key support. Resistance to watch is 1.3391, the 20-day EMA.
AUDUSD TECHS: Approaching Key Resistance
- RES 4: 0.6961 1.236 proj of the Nov 10 - Dec 4 - Dec 7 price swing
- RES 3: 0.6921 High Feb 20
- RES 2: 0.6900 High Jun 16 and a key resistance
- RES 1: 0.6871 High Dec 28
- PRICE: 0.6821 @ 15:24 GMT Dec 29
- SUP 1: 0.6773 Low Dec 22
- SUP 2: 0.6714 20-day EMA
- SUP 3: 0.6605 50-day EMA
- SUP 4: 0.6526 Low Dec 7 and key support
Bullish trend conditions in AUDUSD remain intact and this week’s continuation higher reinforces current conditions. The climb maintains the bullish price sequence of higher highs and higher lows. Sights are on 0.6900, the Jun 16 high and the next key key resistance. On the downside, key short-term support is unchanged at 0.6526, the Dec 7 low. Initial firm support is at 0.6714, the 20-day EMA. Short-term weakness is considered corrective.
