Yesterday’s Euro Area inflation data has somewhat muddied the water for the European Central Bank. The headline HICP measure rose back up to 2.4% in December, the highest level since July, while the core number remained stuck at a still elevated 2.7% for the fourth straight month.
We don’t think that this will derail further cuts from the Governing Council in the coming months (rate setters appear more concerned with the growth slowdown than price pressures), but it may at least trigger an element of dissent among the more hawkish faction.
Mostly second tier economic news will be released during the remainder of the week - perhaps the most noteworthy data point will be Thursday’s retail sales print, although this is for November and runs on a bit of a lag.
EUR/USD will instead continue to be driven by tariff news and Friday’s US payrolls report.
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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