Spain’s Harmonised Index of Consumer Prices (HICP) fell by 0.8% month on month in January.
This was below the expected fall of 0.7% for the month.
This morning’s data shows Spanish consumer prices fell more than expected in January. That supports our view that disinflation across the Eurozone is building. It also pushes back against the European Central Bank’s (ECB) cautiously hawkish tone in late 2025. The Eurozone’s January 2026 inflation flash estimate was already just below the 2% target. A weaker Spanish reading suggests the final Eurozone figure could come in even lower.
As a result, we expect the ECB to shift in a more dovish direction in the coming weeks. Traders may want to position for lower rates by buying Euribor-linked futures. There is a clear precedent: in 2014, persistently low inflation led the ECB into a more aggressive easing cycle than markets expected.
At the same time, policy is moving in the opposite direction in the United States. January job data still points to economic strength, which supports the Federal Reserve staying on hold. This widening gap should weigh on the euro. We view buying EUR/USD put options as a sensible way to benefit from this trend. The last time we saw a similar policy split in mid-2025, the euro fell by more than 3% over the following month.
For equities, lower borrowing costs are supportive. That makes European stocks more appealing and could draw more capital into the region. Buying call options on broad European indices, such as the Euro Stoxx 50, is one way to gain exposure to potential upside as policy becomes more accommodative.
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