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In October, euro zone inflation demonstrated its fastest tempo for almost six years, powered by energy prices. That’s what the European Union statistics agency uncovered on Friday. The given outcome is in line with the agency’s earlier forecast.
Without food and energy, the core inflation measure was updated downwards.
As Eurostat informed, in October, consumer prices in the 19 countries of the euro zone headed north by 2.2% year-on-year after September’s 2.1% rally and August’s 2% leap. It appeared to be the biggest leap since December 2012.
Apparently, the headline figure backs the ECB’s decision to conclude its price-boosting bond-purchasing program at year-end due to the fact inflation is currently overshooting the bank’s objective of price surge below, although close to, just 2% over the medium term.
In less upbeat news for the European Central bank, inflation without the volatile components of energy and also unprocessed food, which is the key gauge that the ECB watches in its policy verdicts, was updated downwards by Eurostat to about 1.2% on the year, from a previous forecast of 1.3%. However, it was still soaring faster than the 1.1% leap reported in September.
In October, headline inflation rallied by up to 0.2% on the month, which is in line with market hopes. However, it speeded down from September’s 0.5%.
The narrower core indicator, observed by a great number of investors, excluding alcohol, tobacco, food, and energy, amounted to 1.1% on the year.
The soar in headline inflation was mostly powered by energy prices that surged by 10.7% in October year-on-year, while prices for other industrial products ascended by just 0.4%.
Inflation in the services sector, which appears to be the largest in the euro zone, accounted for 1.5% on the year, although prices sank by 0.3% on the month.
All attention on the market is on the Brexit process. Fears over the no-deal Brexit pushed the British pound deep down yesterday after UK Prime Minister Boris Johnson claimed he was ready to abandon negotiations.
The market sentiment is mixed, and the US dollar is trading near the lowest levels for over two years. Let’s have a look at the main market movements today.
The market sentiment deteriorated because of the election uncertainty and worries about rising virus cases all over the world. Let's make some analysis!
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.
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