The European statistic office reported that inflation data for the month of December remains far from the European Central Bank’s target of just under 2.00%. The annualized headline figure showed no gains, mirroring the November reading of 0.20% and missing market expectations of 0.30%. Preliminary estimates for consumer prices indicated that items that had the highest pace of annual increase such as food, alcohol and tobacco, slowed to 1.20% appreciation compared to the 1.50% in November. While the ECB moved to provide further monetary stimulus by cutting deposit rates and extending the quantitative easing program, these policy shifts have yet to be felt in the data. Additional monetary stimulus must be prepared in the form of expanded monthly purchases if Europe’s brittle economy fails to meet expectations in the coming months. EURUSD remains near December lows ahead of unemployment figures due later in the session.
Euro Area Inflation Stalls
Daily Analysis - 06/01/2016