The Spanish economy sees modest growth as Q2 GDP rises by 0.7%, surpassing expectations.
by VT Markets
/
Jul 29, 2025
Spain’s economy grew by 0.7% in the second quarter, beating the expected 0.6% increase.
Year-on-year, Spain’s GDP growth is at 2.8%, making it one of the best performers in Europe.
Spanish Economic Resilience
This stronger-than-expected growth signals a positive outlook for Spanish investments in the short term. It highlights Spain’s economic strength compared to other European countries. We should take this opportunity to position ourselves for more gains.
With the unemployment rate below 12%, we have more reason to invest in Spanish stocks. A good strategy might be to buy call options on the IBEX 35 index, aiming for expirations in the next quarter. This approach offers a way to benefit from a potential market rally while keeping our maximum risk in check.
This strong data might also impact the European Central Bank’s next decisions, especially since President Christine Lagarde has stressed the importance of data. Increased domestic demand could raise Spanish bond yields compared to German bunds. We may want to consider interest rate swaps to take advantage of this trend.
Inflation Concerns and Market Strategies
However, we need to stay alert about inflation, currently at a stubborn 3.4%. This ongoing price pressure might dampen market excitement and limit gains in the medium term. Selling out-of-the-money puts can be a good way to earn premiums while betting on stable to moderate growth.
Historically, when Spain has performed well domestically—like from 2015 to 2017—it often led to big rallies in banking and tourism stocks. Past remarks from Lagarde remind us that central bank concerns can create volatility and impact such rallies. This history suggests we should focus our derivative strategies on these key sectors rather than simply on the overall index.
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by VT Markets
Jul 29, 2025
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