HomeContributorsFundamental AnalysisSpanish CPI Hits A Three Decade Highs

Spanish CPI Hits A Three Decade Highs


  • Omicron variant continued to spread but fears continue to ease aided by low hospitalizations. Improved sentiment bolstered as govt resist imposing new, widespread lockdowns.
  • Spain Dec CPI hots its highest annual pace since 1989.
  • Several ECB members hint of the need for normalization soon while others stress continued need for generous financing.


  • South Korea Nov Industrial Production M/M: 5.1% v 2.5%e; Y/Y: 5.9% v 3.4%e.
  • Various markets will be closed for holiday on Fri (Japan and South Korea); Australia and Hong Kong to close early.


  • US President Biden and Russia President Putin to hold a phone call on Thursday (15:30 ET/20:30 GMT) on Ukraine. Biden would make clear to Putin that a diplomatic path remains open but must be conducted in “a context of de-escalation rather than escalation (Note: Call was requested by Russian officials.


  • Saudi King Salman: Oil market stability and balance is a pillar of Saudi energy policy, important that all producers comply with OPEC+ agreement, its essential to market stability.

Speakers/Fixed income/FX/Commodities/Erratum


  • Indices [Stoxx600 +0.31% at 489.50, FTSE +0.07% at 7,425.70, DAX +0.12% at 15,871.00, CAC-40 +0.30% at 7,182.94, IBEX-35 +0.09% at 8,681.41, FTSE MIB +0.19% at 27,396.00, SMI +0.31% at 12,966.60, S&P 500 Futures +0.12%].
  • Market Focal Points/Key Themes: European indices open generally higher (notable exception IBEX following CPI numbers) but later slipped to trade mixed; trading light in the last full day of open markets for the year; better performing sectors include financials and materials; while laggards include industrials and consumer discretionary; Iren takes take in Alega; Norsk Hydro further curtails aluminum production due to high electricity prices; no major earnings expected during the upcoming US session.


  • Consumer discretionary: Hugo Boss [BOSS.DE] +2% (press interview).
  • Energy: Gazprom [GAZP.RU] -1% (Has not booked gas transit capacity for exports via the Yamal-Europe pipeline for 10th day in a row).
  • Industrials: Skanska [SKAB.SE] +1% (contract award).


  • ECB’s Visco (Italy) stated that he expected inflation to average 3.0% for 2022, then to gradually slow to just below 2.0% target. ECB would not taper before 2023 and to maintain very favorable financing conditions. ECB Staff Projection that inflation to be below 2% in 2023/24 period was exposed to both upside and downside risks.
  • ECB’s Holzmann (Austria) stated that inflation to peak around turn of year and then slowly ease. ECB should initiate abandoning negative rates in 2022.
  • ECB’s Knot (Netherlands) noted that the Omicron virus variant to have little impact on prices in 2022. He added that if the impact was bigger than ECB was ready to change its policy faster.
  • Russia Fin Min Siluanov stated that 2021 GDP growth was seen at 4.5%.
  • China PBoC official Zou Lan: Structural adjustments of property market via M&A to help companies lower debt.
  • China Q4 GDP growth seen at 3.2% (record low) amid resurgence of the Covid-19 pandemic. Stabilizing economic policies seen taking effect in the following quarter. Possibilities of another requirement reserve ratio cut in the first quarter, as well as a loan prime rate decrease, and slashed interest rates for open market operations.

Currencies/Fixed Income

  • Continued unwinding of safe-haven flows weakened the JPY currency (Yen) and USD during Asia. The recent improved in sentiment aided as many governments resisted imposing new, widespread lockdowns despite the Omicron variant recent surge in infections.The greenback was trying to regain its composure as the EU session progresses.
  • EUR/USD drifted lower to retest the 1.13 area as various ECB members provided contracting view on policy. ECB Visco putting the usual dovish tilt on the need to maintain accommodative financing while Northern ECB members Holtamann and Knot hinted of the need for normalization.
  • USD/JPY holding above the 115 level in the session.
  • The TRY currency (Lira) weakened for a 4th session to test beyond the 13.40 against the USD. Economists focued on FX Reserve data for Turkey and estimated that the government might have intervened heavily in foreign-exchange markets to buy TRY currency (Lira) to counter the currency’s downward spiral.(Turkey end-Nov Gross Foreign Reserves were at $85.0B with Net Reserves at $22.5B. Analysts had noted that FX intervention cost the central bank at least $5.5B in foreign-exchange assets in the days around the unveiling of the deposit plan.

Economic data

  • (NL) Netherlands Dec Producer Confidence Index: 10.2 v 12.7 prior.
  • (FI) Finland Nov House Price Index M/M: 0.2% v 0.8% prior; Y/Y: 3.6% v 3.5% prior.
  • (RU) Russia Dec PMI Services: 49.5 v 48.8e (3rd straight contraction); PMI Composite: 50.2 v 48.4 prior.
  • (UK) Dec Nationwide House Price Index M/M: 1.0% v 0.5%e; Y/Y: 10.4% v 9.4%e.
  • (TR) Turkey Dec Economic Confidence: 97.6 v 99.3 prior.
  • (TH) Thailand Nov Current Account Balance: +$0.3B v -$0.9Be; Overall Balance of Payment (BOP): -$2.2B v +$1.2B prior; Trade Account Balance: $4.3B v $3.8B prior; Exports Y/Y: 23.7% v 17.0% prior; Imports Y/Y: 13.5% v 20.1% prior.
  • (ES) Spain Dec Preliminary CPI M/M: 1.3% v 0.3%e; Y/Y: 6.7% v 5.6%e (highest annual pace since 1989).
  • (ES) Spain Dec Preliminary CPI EU Harmonized M/M: 1.2% v 0.4%e; Y/Y: 6.7% v 5.7%e.
  • (CH) Swiss Dec KOF Leading Indicator: 107.0 v 106.3e.
  • (AT) Austria Nov PPI M/M: 1.5% v 3.2% prior; Y/Y: 15.3% v 14.0% prior.
  • (HU) Hungary Central Bank raised its One Week Deposit Rate by 20bps to 4.00% (7th straight weekly increase).
  • (ES) Spain Oct Current Account Balance: €2.1B v €1.2B prior.
  • (NO) Norway Central Bank (Norges) Jan Daily FX Purchases (NOK): -250M v 0Me (**Insight: Norway to buy NOK1.7B per day on behalf of govt).

Fixed income Issuance

  • None seen.

Looking ahead

  • (EG) Egypt Q3 GDP Constant Q/Q: No est v 1.9% prior.
  • (MX) Mexico Nov YTD Budget Balance (MXN): No est v -351.0B prior.
  • (AR) Argentina Dec Consumer Confidence Index: No est v 39.7 prior.
  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds.
  • 06:00 (CZ) Czech Republic to sell CZK5.0B in 1-month Bills.
  • 06:00 (IL) Israel Nov Chain Store Sales M/M: No est v 0.1% prior.
  • 06:00 (PT) Portugal Nov Industrial Production M/M: No est v 0.5% prior; Y/Y: No est v -6.7% prior.
  • 06:00 (HU) Hungary Central Bank FX Swap Tender.
  • 07:00 (ZA) South Africa Nov Monthly Budget Balance (ZAR) -10.3Be v -36.8B prior.
  • 07:30 (BR) Brazil Nov Primary Budget Balance (BRL): 7.5Be v 35.4B prior; Nominal Budget Balance: -34.2Be v -25.0B prior; Net Debt to GDP Ratio: 57.9%e v 57.6% prior.
  • 08:00 (RU) Russia Q3 Final Current Account Balance: No est v $40.8B prelim.
  • 08:00 (RU) Russia Gold and Forex Reserve w/e Dec 24th: No est v $626.3B prior.
  • 08:00 (UK) No Daily Baltic Dry Bulk Index this week.
  • 08:30 (US) Initial Jobless Claims: 207Ke v 205K prior; Continuing Claims: 1.88Me v 1.859M prior.
  • 08:30 (US) Weekly USDA Net Export Sales.
  • 09:45 (US) Dec Chicago Purchasing Managers Index (PMI): 62.0e v 61.8 prior.
  • 10:00 (CO) Colombia Nov National Unemployment Rate: No est v 11.8% prior; Urban Unemployment Rate: 11.7%e v 12.3% prior.
  • 10:30 (US) Weekly EIA Natural Gas Inventories.
  • 13:00 (US) Treasury to sell 4-Week and 8-week Bills.
  • 18:00 (KR) South Korea Dec CPI M/M: -0.2%e v +0.4% prior; Y/Y: 3.6%e v 3.7% prior; CPI Core Y/Y: No est v 2.3% prior.
  • 19:30 (AU) Australia Nov Private Sector Credit M/M: 0.5%e v 0.5% prior; Y/Y: No est v 5.7% prior.
  • 20:00 (CN) China Dec Manufacturing PMI (Govt official): 50.0e v 50.1 prior; Non-manufacturing PMI: 52.0e v 52.3 prior; Composite PMI: No est v 52.2 prior.
  • 21:00 (SG) Singapore Nov M2 Money Supply Y/Y: No est v 2.2% prior; M1 Money Supply Y/Y: No est v 9.1% prior.


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