Eurozone: Headline CPI rate may slow to 1.2% - BBH

According to analysts at BBH, the preliminary February CPI for the eurozone is the most contemporaneous data and the headline rate may slow to 1.2% from 1.3%, partly reflecting the softer oil prices this month.

Key Quotes

“The core rate may have held steady at 1.0%.  While not targeted, this rate has assumed greater significance under Draghi than his predecessor Trichet.  The market will be sensitive to any surprise, thinking that it will impact the debate between the doves and hawks since it is the last CPI report before the early March ECB meeting.  On a trade-weighted basis, the euro has edged fractionally higher, while service prices look firm.  Money supply (M3) growth slowed every month in Q4 17 but may have stabilized in January.  Separately, and consistent with the recent PMI readings, German IFO and ZEW and French business surveys and other eurozone confidence surveys for February will likely soften.”