Euro area flash inflation: Higher core, temporarily – Nordea

Analysts at Nordea Markets see a stronger than expected rise in the Eurozone inflation in November as a temporary surge until year-end and continue to expect more easing from the ECB next year.

Key Quotes:

“The flash release comes with few details. The rise in this month’s numbers stems from various factors. Service sector price growth increased sharply compared to last month, and food prices provided a boost. Energy prices on the other hand remained a drag on headline, despite rising oil prices.”

“Today’s numbers do not change our view of a next easing package from the ECB in March (10bp cut and 20bn additional QE). Inflation will remain below target for some time to come but the ECB is in a “wait and see” position to evaluate how the September package is playing out and what the next steps will be.”