Eurozone: Headline inflation likely to slip to 1.2% y/y - TDS

Analysts at TDS are looking for today’s Eurozone inflation report to show headline inflation slipping a tenth lower to 1.2% y/y (mkt 1.2%), but for core inflation to hold steady at 1.0% y/y.

Key Quotes

“We had initially seen the risks for core inflation as lying to the upside, but after the softer German print yesterday we see risks as more balanced now. And if food prices are as weak for the Eurozone as they seemed to be for Germany, that leaves some downside risks to the headline print. Going forward, we think that core inflation could hold around the 1.0-1.1% y/y mark for the next several months, and question whether that will meet the ECB’s criteria that it has set out in order to end QE after September.”