In December, Spain’s HCOB Manufacturing PMI was 49.6, falling short of the expected 51.1. A PMI under 50 indicates a decline in activity, signaling a contraction in the manufacturing sector. This situation hints at ongoing problems such as supply chain disruptions and changing demand, which could hinder Spain’s economic recovery and growth in the coming year.

Impact On Eurozone

The lower PMI results raise concerns about the Eurozone’s economic outlook. This is especially important given the ongoing effects of inflation and changes in interest rates. The unexpectedly low PMI may prompt a closer look at monetary policy and economic strategies in Spain. This evaluation is crucial as Spain navigates these economic difficulties. Last month, December 2025, Spain’s manufacturing PMI unexpectedly dropped to 49.6, when an increase to 51.1 was anticipated. This unexpected result highlights weaknesses in a key area of the Eurozone economy. Traders should view this data as a possible early sign of broader European sentiment shifts. This reading is worrying since it breaks a fragile trend of stability observed in the third quarter of 2025. The Spanish industrial production figures from late 2025 already indicated a slowdown, and this PMI reinforces that trend. Traders might find defensive derivative strategies more appealing in the coming weeks.

Trading Strategies

Considering this weakness, traders should think about buying put options on the IBEX 35 index. Major industries on this index are likely to feel earnings pressure, which could pull the entire market down. This approach can help profit from or protect against a potential downturn in Spanish stocks. The disappointing data from Spain also puts pressure on the Euro, contributing to a downward trend in the EUR/USD exchange rate, which has struggled recently. Traders could look into put options on Euro currency ETFs or futures contracts to prepare for a possible decline. Most importantly, this manufacturing miss shifts the outlook for the European Central Bank’s policies. With inflation in the Euro area cooling to 2.4% in the last quarter of 2025, this growth scare reduces the likelihood of the ECB raising rates further. Derivative traders should now consider interest rate futures that bet on the ECB keeping rates steady or even hinting at potential cuts later in 2026. Create your live VT Markets account and start trading now.

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