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Spain’s Producer Price Index (PPI) fell -3.0% y/y in December, extending producer-level deflation and coming in weaker than the -2.5% prior reading. The print reinforces the message that input and energy-related price pressures at the factory gate remain subdued, which can translate into softer downstream inflation dynamics over time—supportive for the broader disinflation narrative across the euro area.

The Eurozone’s January HCOB PMIs were broadly steady but with a clear internal rotation. The Composite PMI held at 51.5 (in line with the prior, just under 51.6 expected), signaling modest expansion. Manufacturing PMI rose to 49.4 (vs 49.1 expected, 48.8 prior), showing gradual improvement though still in contraction. Services PMI slipped to 51.9 (vs 52.6 expected, 52.4 prior), indicating softer momentum in the dominant services sector.

Market impact: Net slightly dovish at the margin (services cooling offsets manufacturing improvement), limiting upside for EUR and keeping ECB pricing biased toward patience/easing; cyclicals may prefer the manufacturing rebound, but growth tone remains only moderate.

Germany’s January HCOB PMIs improved broadly. Manufacturing PMI rose to 48.7 (vs 47.8 expected, 47.0 prior), signaling a continued contraction but with a clear easing in the downturn. Services PMI ticked up to 53.3 (vs 52.6 expected, 52.7 prior), staying firmly in expansion. The Composite PMI climbed to 52.5 (vs 51.8 expected, 51.3 prior), pointing to stronger overall activity momentum at the start of the year.

Market impact: Modestly supportive for EUR sentiment and German/Eurozone cyclicals; may reduce near-term recession pricing, but manufacturing below 50 keeps the growth outlook uneven and limits any hawkish repricing of ECB expectations on PMI data alone.

France’s January HCOB PMI picture deteriorated overall despite a manufacturing uptick. Manufacturing PMI rose to 51.0 (vs 50.4 expected, 50.7 prior), moving deeper into expansion. But Services PMI fell sharply to 47.9 (vs 50.3 expected, 50.1 prior), dragging the Composite PMI down to 48.6 (vs 50.1 expected, 50.0 prior). The divergence suggests services-driven demand is weakening, offsetting gradual factory stabilization.

Market impact: Slightly dovish for ECB pricing at the margin and a mild headwind for EUR if services weakness persists; supports a cautious outlook for French/Eurozone growth-sensitive equities, even as manufacturing pockets improve.

France’s Business Survey strengthened in January, with the headline index rising to 105 (vs 101 expected, 102 prior). The upside suggests improved corporate sentiment and activity expectations at the start of the year, reinforcing a modestly better near-term growth tone.

Market impact: Mildly supportive for French/European cyclicals and EUR sentiment at the margin, though ECB pricing will still hinge more on inflation and wages than on a single confidence print.

Economists in a Reuters poll expect Germany—after barely expanding last year—to grow 1.0% in 2026 and 1.5% in 2027, broadly unchanged from October forecasts, partly reflecting optimism around infrastructure spending plans. France is also seen growing 1.0% in 2026 and 1.1% in 2027, versus 0.9% and 1.2% projected three months ago.

Market impact: Modestly supportive for European cyclicals and EUR sentiment at the margin, but the rates/FX impulse should still be driven mainly by inflation, wages, and ECB guidance rather than incremental forecast tweaks.

Eurozone consumer confidence edged higher in January to -12.4, beating expectations (-13.0) and improving from -13.2 previously. The move suggests households are becoming marginally less pessimistic, consistent with easing inflation pressure and stabilising real-income dynamics, even as growth remains uneven across the bloc.

Market impact: Modestly supportive for EUR sentiment and European domestic cyclicals, but unlikely to materially shift ECB pricing on its own; the rate path will still be driven by inflation, wages, and activity data.

Switzerland’s M3 money supply eased slightly in December to CHF 1,210.9B, down from CHF 1,211.6B previously. The marginal dip suggests stable-to-soft liquidity growth at the broad-money level, consistent with Switzerland’s low-inflation regime and cautious credit conditions.

Market impact: Typically CHF-neutral and not a stand-alone market mover; it marginally supports a “contained inflation/liquidity” backdrop for SNB policy, with FX still driven more by global risk sentiment and rate differentials.

Eurozone construction output declined -1.06% m/m in November, reversing the prior month’s +1.66% gain. The pullback underscores continued volatility and softness in a rate-sensitive sector still dealing with tighter financing conditions and uneven demand across residential and commercial activity.

Market impact: Mildly growth-negative for the euro area at the margin and supportive for a cautious rates outlook; limited direct FX impact, but persistent weakness would reinforce a dovish tilt in ECB expectations.

Germany’s ZEW survey delivered a strong improvement in forward-looking confidence. ZEW Economic Sentiment jumped to 59.6 in January (vs 50.0 expected, 45.8 prior), signaling a sharp pickup in expectations for the next six months. However, the Current Conditions gauge remains severely negative at -72.7—even though it improved versus -81.0 previously and beat the -75.5 forecast—highlighting that the present-day economy is still in a weak spot while optimism builds about the outlook.

Market impact: Modestly EUR-supportive and constructive for Germany/Europe cyclicals at the margin, while also nudging rates higher if markets read it as reduced recession risk; however, the very weak current-conditions level keeps a growth caution flag in place.

Eurozone ZEW Economic Sentiment rose to 40.8 in January, beating expectations (36.7) and improving from 33.7 previously. The stronger reading signals a firmer outlook among financial-market participants, suggesting confidence is rebuilding even as the macro backdrop remains shaped by disinflation, growth uncertainty, and geopolitical risk.

Market impact: Mildly supportive for EUR and European cyclicals at the margin, but the sustainability of the improvement will matter; rates and geopolitical headlines are still likely to dominate near-term pricing.

Spain’s 3-month Letras auction cleared at 1.954%, down from 1.974% previously, signaling steady demand and slightly easier front-end funding conditions. The marginal drop is consistent with a broader market bias toward lower short-end yields as disinflation trends gain traction across Europe.

Market impact: Mildly supportive for Spanish front-end debt (lower yields) and, at the margin, slightly dovish for ECB-rate expectations—typically EUR-neutral to slightly negative if the easing theme strengthens.