Eurozone November CPI Inflation Increases To 30-Month High Of 0.6%

According to the flash estimate, Eurozone year-on-year CPI inflation increased to 0.6% from 0.5% the previous month and this was the highest reading since May 2014.

The core annual rate was unchanged at 0.8% and both readings were in line with market expectations.

The annual decline in energy prices was slightly higher at 1.1% from 0.9% the previous month as oil prices faded from October highs, although this was still much higher than the 7.3% decline recorded for November 2015.

The annual increase in food and drink prices increased slightly to 0.7% from 0.4% previously.

The annual rate in non-energy industrial goods was unchanged at 0.3% compared with 0.6% in November 2015, while the services-sector rate was also steady on the month with a slight decline from the 1.2% rate seen in November 2015.

The data overall adds little to the inflation debate with relief over a gradual improvement in the headline rate offset by concerns surrounding a lack of upward trajectory for the underlying rate.

The data overall will maintain pressure for the ECB to sustain a very accommodative monetary policy over the next few months.

There was little reaction in currency markets with EUR/USD holding around 1.0640 amid month-end flows. Bunds edged marginally lower with a loss of 20 ticks on the day, while higher oil prices propelled the DAX into positive territory.

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Tim is a contributing author to He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.