30 Jan 2015
Euro inflation weakens further - Danske
FXStreet (Barcelona) - Pernille Bomholdt Nielsen, Senior Analyst at Danske Bank, reviews today’s Eurozone CPI release, adding that lower energy prices are the prime drivers for euro’s deflation.
Key Quotes
“Euro HICP inflation declined further into deflation in January, when it was -0.6% y/y down from -0.2% y/y in December.”
“The deflation was mainly driven by negative energy price inflation due to the sharp decline in the oil price. Energy prices declined 2.8% m/m in January, implying the yearly rate of inflation was -8.9% y/y from -6.3% y/y in December.”
“Core inflation declined to a new historically low of 0.6% y/y in January. The decline in core inflation is likely to reflect some indirect and second-round effects of the decline in the oil price.”
“Although core inflation is at a historic low, euro deflation is still mainly driven by low energy price inflation, and real wage growth is higher than it has been for a long time.”
Key Quotes
“Euro HICP inflation declined further into deflation in January, when it was -0.6% y/y down from -0.2% y/y in December.”
“The deflation was mainly driven by negative energy price inflation due to the sharp decline in the oil price. Energy prices declined 2.8% m/m in January, implying the yearly rate of inflation was -8.9% y/y from -6.3% y/y in December.”
“Core inflation declined to a new historically low of 0.6% y/y in January. The decline in core inflation is likely to reflect some indirect and second-round effects of the decline in the oil price.”
“Although core inflation is at a historic low, euro deflation is still mainly driven by low energy price inflation, and real wage growth is higher than it has been for a long time.”