The initial reaction seems to be one that traders are taking at face value, with Spanish inflation falling more than estimated. The expected figure was already marked much lower than February to take into account base effects, but a fall back closer towards 3% is perhaps giving room for optimism in the bigger picture.
That said, I wouldn't be too confident though. The monthly readings are still showing increases in price pressures and core inflation remains stubbornly high, even if there is a bit of a lagged effect.
We will have to see how things progress in the months ahead to be sure but either way, at least base effects coming into play is something that might adjust for lower headline inflation - for now at least.
