EUROPEAN INFLATION: Spanish Inflation Slightly Higher-than-expected In July
Jul-30 07:00
- Spanish flash July HICP was a tenth above consensus on a rounded basis at 2.7% Y/Y (vs 2.6% cons, 2.3% prior). Core HICP (excluding energy and unprocessed foods) was estimated at 2.3% Y/Y (vs 2.2% prior).
- Flash CPI was also 2.7% Y/Y (vs 2.4% cons, 2.3% prior), with core CPI at 2.3% Y/Y (vs 2.2% cons and prior).
- The slighty higher-than-expected core CPI reading suggests services, non-energy industrial goods or processed foods components were behind the surprise in July, even if most of the annual acceleration came from energy. The press release notes that the Y/Y increase “is mainly due to the increase in electricity prices, compared to the decrease in July 2024 and, to a lesser extent, to the increases in fuel prices”.
- There was some uncertainty amongst analysts on the impact of public transport prices on July inflation, but unfortunately there is no colour on core components in the flash release. Final July data is due on August 13.
- For context, Spain represents 12% of the Eurozone HICP basket in 2025
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GILTS: Opening calls
Jun-30 06:57
Gilt Calls, 92.79/92.96.
CROSS ASSET: Gold Edges towards $3,300.00, the Dollar extends losses
Jun-30 06:47
- Gold is firming back towards $3300.00 handle, a Dollar led move with the latter printing fresh broader lows versus the EUR, SGD, CZK, INR, MXN, SEK, THB, and ZAR.
- The resistance in EURUSD comes at 1.1753 High Jun 27.
STIR: Over 50bp Of BoE Cuts Through Dec Still Priced
Jun-30 06:41
GBP STIRs consolidate the modest dovish move seen post-SONIA settlement on Friday.
- BoE-dated OIS shows 20bp of easing for August, 26bp through September, 43bp through November and 53bp through year-end.
- SONIA futures flat to +2.5.
- Those that hold dovish views have not been able to force a sustainable move through 55bp of cuts through year-end in recent sessions.
- Our baseline view continues to look for 2 cuts (August and November) through year-end at this stage, although risks seem skewed to the dovish side given the recent evolution of labour market data.
- In line final Q1 GDP, a wider-than-expected current account deficit and lower tier Lloyds Business Barometer data did little for markets at the open.
- Little of note on the UK calendar for the remainder of the day.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Aug-25 | 4.015 | -20.2 |
Sep-25 | 3.955 | -26.2 |
Nov-25 | 3.786 | -43.1 |
Dec-25 | 3.688 | -52.9 |
Feb-26 | 3.552 | -66.5 |
Mar-26 | 3.509 | -70.8 |
