EZ CPI Flash Estimate y/y

Today’s eurozone flash CPI should end any chance of a 50bp ECB cut next month. A large undershoot would be needed to push market expectations back in that direction after officials did not latch on to the weaker PMIs. In France, it looks as if the worst can be avoided, but the difficult politics of reining in the deficit are not going away Spanish and German CPI slightly undershot consensus, which means a 50bp cut in December is not fully off the table. Having said that, the eurozone CPI today will have to come in significantly below ...

video The Federal Reserve’s surprise decision in September to cut rates by a larger-than-expected 50-basis-points seems like a distant memory now, as policymakers are once again sending out hawkish soundbites. US economic indicators since the September meeting have been on the strong side, including the CPI report, with Fed officials cautioning that another 50-bps cut is unlikely in the near term. The sudden switch in the narrative from ‘hard landing’ to ‘soft landing’, or possibly even a ‘no landing’, has spurred a sharp reversal ...

Headline inflation declined to 1.8% in September. Lagarde indicated already yesterday that the October meeting is back in play, and we have changed our ECB forecast. We now expect a rate cut in October, followed by back-to-back cuts until April 2025. Euro-area headline inflation declined below the ECB target to 1.8% in September (2.2% in August) mainly due to a decline in energy prices. Core inflation slowed down as well but much less dramatically, from 2.8% to 2.7%. Both numbers were right at the consensus and indicate that ...

Euro zone inflation fell to 1.8% in September, coming in below the European Central Bank’s 2% target, flash data from statistics agency Eurostat showed Tuesday. The reading was in line with the expectations of economists polled by Reuters, after annual inflation hit a three-year-low of 2.2% in August. The core inflation rate, which excludes more volatile energy, food, alcohol and tobacco prices, came in at 2.7%. It was forecast to remain unchanged from the August reading of 2.8%. Services inflation in the euro zone eased to 4% in ...

Inflation rates on both sides of the Atlantic continue to cool, setting the stage for interest rate cuts by key central banks later this month. In the United States, personal consumption expenditure (PCE) inflation met expectations in July, showing a modest rise both monthly and annually. Meanwhile, in Europe, inflation fell closer to the target of 2%, reaching its lowest level in three years. Economists attributed the easing in Europe's annual inflation rate to a significant decline in Germany's economy, strengthening the case for a ...