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EuroZone CPI & What the ECB Can Do


Tomorrow we get our first look at this month’s inflation figures from the EuroZone. This data is crucial for the common currency as it is the data the ECB will use when making its interest rate decision in two-and-a half weeks. Since it’s flash data, it might be revised later, of course. These revisions are often small and rare, so it would be a significant shakeup if they were to occur. For now, what happens with the Flash November CPI is likely to define the Euro’s trajectory until the ECB meeting.

The truth is that the release of data might not trigger the most reaction because the largest economies are reporting ahead. The market is able to predict directionality. If both France and Germany’s inflation is below expectations, then the market will expect the Eurozone to have a similar pattern. If these two countries meet expectations, the same can be expected for the entire shared economy. However, if France and Germany move in opposite directions, the market may not be able to react until all data are available.

What to watch out for

France reports its inflation figures 15 minutes before the European markets open. Inflation is…

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