Inflation Impact on the EUR Softened by Lagarde Comments from Monday

It’s a quiet day on the economic calendar today. Following 4^th quarter retail sales figures from New Zealand, finalized January inflation figures for the Eurozone were in focus this morning.

The stats follow comments from ECB President Lagarde from Monday, where she stated that the ECB was closely monitoring bond yields.

Eurozone Inflation

In January, the annual rate of core inflation accelerated to 1.4%, according to finalized figures. This was up sharply from just 0.2% in December, while in line with prelim figures.

The consumer price index was also on the rise after a 0.3% fall in December, year-on-year. In January, consumer prices rose by 0.9%, which was also in line with prelim figures.

Month-on-month, consumer prices rose by 0.2%, following a 0.3% increase in December.

According to Eurostat,

• A year earlier the rate of annual inflation was 1.4%.
• Greece (-2.4%), Slovenia (-0.9%), and Cyprus (-0.8%) registered the lowest annual rates of inflation in January.
• In January, the highest contribution to the annual euro area inflation came from services (+0.65 pp).
• Non-energy industrial goods (+0.37 pp) and food, alcohol, & tobacco (+0.30 pp) also contributed.

Market Impact

Ahead of the stats, it was a mixed start to the day for the EUR, which rose to an early high $1.21801 before falling to a pre-stat low of $1.21452.

Upon the release of the inflation figures, the EUR moved from $1.21493 to $1.21516 before easing back.

At the time of writing, the EUR was down by 0.04% to $1.21488.

Next Up

U.S consumer confidence figures for February and FED Chair Powell testimony.