Eurozone: Unchanged core inflation in December – Nordea

Analysts at Nordea Markets note that Eurozone’s core inflation remained unchanged at 1.3% YoY in December while headline inflation came at 1.3% YoY in December, up from 1.0% YoY in November.

Key Quotes

“Energy prices pushed headline inflation higher in December, contributing with almost 0.4% points more in December compared with November.”

“Core inflation remained unchanged as both core goods and core services remained roughly unchanged. German package holiday prices did put upward pressure on core services prices in December, and from that perspective, today’s numbers are perhaps slightly disappointing.”

“The ECB is likely to be unaffected by today’s numbers. On the one hand, 1.3% core is higher than it has been for a quite some time and momentum is building gradually. But, on the other hand, core inflation is likely to be lower already next month and activity indicators are probably more important until the risks of a deeper downturn have diminished.”

“In sum, today’s numbers are likely to keep the ECB in a wait-and-see mode.”