Breaking: Eurozone Preliminary HICP inflation softens to 2.4% YoY in November vs. 2.7% expected

The Eurozone Harmonised Index of Consumer Prices (HICP) increased 2.4% on an annual basis in November, down from October’s 2.9% rise, the official data published by Eurostat showed on Thursday. The data beat the market expectations of a 2.7% print.

The Core HICP inflation eased to 3.6% YoY in November, as against October’s 4.2% uptick. The market consensus was for a 3.9% increase in the Core HICP.

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The European Central Bank’s (ECB) inflation target is 2.0%. The old continent’s HICP inflation data significantly influences the market’s pricing of the ECB interest rate outlook.

Following softer-than-expected German, French and Spanish inflation data, the “ECB euro short-term rate (ESTR) forwards priced in a policy rate reduction of over 110 basis points (bps) in 2024 from around 95 bps the day before. They also discount an around 95% chance of a first 25 bps rate cut in April 2024,” according to Reuters.