Spanish PMI voices success of reforms

Today Markit economic released Spanish PMI report on services that showed that both services and composite PMI reached 9 year high.

Key highlights -

• April data indicated that growth accelerating at record pace not seen since 2008 pre-crisis. Headline index rose to 60.3 in April from 57.3 in March.
  
  
• Output has been rising since last 18 months in services sector. Financial services industry going at fastest pace followed by transport and storage facility. Woe for financial services industry and banks might be coming to an end.
  
  
• New business orders are rising at fastest pace since June 2000.
  
  
• Pace of job creation in services reached seven year high.

It seems clear than austerity and reform policies has succeeded in Spain, as it reaping the benefits of European Central Bank's monetary policy easing and very well likely to continue to do so for the next years.

Possible trades -

• Spanish stocks remains very lucrative as they would reap most of the benefits of return to growth. Spanish benchmark stock index IBEX is trading close to 11136, far from its pre-crisis high of stands a buy over longer term horizon, in short term risk aversion might push index lower.
  
  
• Spanish real estate prices would follow growth and stands a good longer term investment.
  
  
• Countries like France, Italy, and Greece are lagging in implementing reform policies. These countries' assets would lag that of Spanish in the longer horizon.