The Spanish stock index Ibex-35 showed a slight rebound on Thursday, in a market dominated by caution as it awaits US inflation figures for December, which could provide clues as to the direction of Federal Reserve (Fed) interest rates.

According to LSEG's IRPR tool, markets currently project interest rates to fall to 3.9% in December, down from 5.25%-5.5% currently, and the odds of cuts beginning in March stand at 68.8%.

However, these estimates have been tempered in recent days by signs of greater-than-expected strength in the economy and comments from the heads of major central banks calling for caution.

"The (US CPI) data will be particularly relevant in determining to what extent the market's expectations of intervention rate cuts are overly optimistic (up to six cuts in 2024, with the first in March of 25 bp with a 65% probability), which in our opinion are still taking into account that the US economy is still strong and inflation remains at 3%-4% levels," they indicate at the Renta 4 securities house.

"Although this is a notable moderation from the double-digit levels it reached in 2023, it is still far from the 2% target that we believe will not be easy to reach in the short term."

Analysts' forecasts consulted by Reuters point to the year-on-year CPI rising from 3.1% in November to 3.2% in December, while the monthly would come in at +0.2%, compared to a 0.1% increase the previous month. The underlying indicator would go from 4.0% to 3.8% year-on-year in December, with a monthly increase of 0.3%, the same as in November.

In addition, concerns persisted over the escalation of the war in the Middle East, with new Israeli offensives in Gaza and Houthi attacks on shipping in the Red Sea.

At 0805 GMT on Thursday, Spain's selective Ibex-35 stock market index was up 48.90 points, or 0.49%, to 10,116.00 points, while the FTSE Eurofirst 300 index of large European stocks was up 0.56%.

In the banking sector, Santander rose 0.62%, BBVA gained 0.86%, Caixabank advanced 1.55%, Sabadell gained 1.33%, Bankinter gained 0.97%, and Unicaja Banco rose 0.66%.

Among the large non-financial stocks, Telefónica gained 0.46%, Inditex advanced 0.52%, Iberdrola gained 0.39%, Cellnex gained 0.08%, and the oil company Repsol rose 0.70%.

(Information by Tomás Cobos; edited by Benjamín Mejías Valencia)