Past Performance is not a reliable indicator of future results.
The traction in subsiding consumer prices in Europe has culminated this morning with the release of the Euro Zone CPI data. Once again, the reading has come in below expectations. Headline prices dropped to 2.4% – the lowest level since August 2021 – from 2.9% in October; predictions were for a drop to 2.7%. On a monthly basis, prices have contracted 0.5%. Core inflation remains slightly stickier but has also dropped more than expected to an 18-month low at 3.6%.
The weaker readings were expected given the setup in localised CPI readings was already pointing to a general drop in inflationary pressures. Nonetheless, the softer reading in the Euro Zone has aided European equities even further.
In the FX space, the EUR/USD pair continues to be dominated by the US dollar side of the trade. An uptick in yields is dragging the USD higher which is causing EUR/USD to retrace recent gains, moving back towards the 1.09 mark. Most of this momentum has come from an upward revision in US Q3 GDP to 5.2% from 4.9%, giving once again another insight into how robust the US economy has been, pushing back expectations about upcoming rate cuts. So far the softer CPI reading seems to have had little effect on the pair
EUR/USD daily chart
Past Performance is not a reliable indicator of future results.
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Source link : https://capital.com/cpi-drops-more-than-expected-in-europe-spain-s-ibex-35-looking-to-break-pre-covid-highs
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Publish date : 2023-11-30 08:00:00
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