EZ Core CPI Flash Estimate y/y

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 ...

The coming week’s main focal points are likely to be US nonfarm payrolls and wages, Eurozone CPI, and potentially key central bank speak from Federal Reserve and ECB officials. As the seasons shift to autumn in the northern hemisphere, so may the seasonal adjustments to nonfarm payrolls become more favourable and—if so—then in a way that may temper concerns about the US job market and how quickly the FOMC should be cutting rates. Watch for key addresses by Powell and Lagarde plus other officials, and Colombia’s central bank will ...

Inflation in the 20 European Union countries that use the euro fell sharply to 2.2% in August, opening the door for the European Central Bank to cut interest rates as the ECB and the U.S. Federal Reserve prepare to lower borrowing costs to support growth and jobs. The August figure was down from 2.6% in July, according to figures Friday from European Union statistics agency Eurostat. Energy prices fell in August by 3%, helping lower the overall figure, while inflation fell to 2% in Germany, the eurozone’s largest economy. The monthly ...

In the middle of last week, the Fed funds futures discounted 103 bp of cuts this year. There was some movement but after Fed Chair Powell’s, but the market finished the week with 104 bp of cuts priced into the Fed funds futures curve. The two-year note yield settled at a three-week low and the dollar slumped. The Dollar Index's 1.7% lost last week, its fifth consecutive drop and the largest weekly decline of the year. Although the euro rose to $1.12, its best level since July 2023, and sterling appreciated to $1.3230, its best level ...