Eurozone: Positive surprise in core CPI might just keep the ECB doves at bay - ING

With ECB policymakers still toeing a fairly cautious line, today’s flash Nov EZ CPI reading will be closely watched for any nascent signs of underlying inflationary pressures, suggests the research team at ING.

Key Quotes

“Our economists are looking for the headline figure to come in around 1.4% YoY (cons: 1.6%) – though there are upside risks after the positive German CPI print (albeit driven by oil price base effects). Core CPI is likely to matter more for the ECB’s policy reaction function; any upside surprise here – beyond a pick-up to 1.0% as markets expect – may give a bit of a boost to short-term EZ rates and the euro. EUR/$ to stay supported above 1.18 amid a noisy US calendar.”