While still in Y/Y deflation, Spanish headline PPI reached its highest level since April '23, as the downward impact of energy base effects continues to fade. However, the other major sub-components showed continued disinflationary progress - an encouraging sign for the core goods outlook ahead of Thursday's February CPI flash release.

• January headline PPI was -3.8% Y/Y vs -6.3% prior. There was no consensus for the print.
• At a component level, energy PPI remained in deflation, but the -12.6% Y/Y was the highest since February '23 (vs -20.6% in December).
• However, we suspect that energy prices should continue falling Y/Y for several months yet, since the energy PPI index peak was seen in August 2022 (vs Italy who saw the peak in December 2022, for example).
• A reminder that Spanish flash CPI for February will be released on Thursday, with early consensus looking for a deceleration in CPI and HICP Y/Y inflation vs January (CPI: 2.8% Y/Y vs 3.4% prior; core CPI: 3.3% Y/Y (vs 3.6% prior); HICP: 2.8% Y/Y vs 3.5% prior).