Analysts Track Core at 3.0-3.2% Y/Y, Recognizing Services Stickiness

Sellside analysts track February Eurozone core HICP inflation at around 3.0-3.2% Y/Y, higher than the 2.9% Y/Y consensus going into the release and only slightly lower than the 3.3%Y/Y. Headline HICP inflation is seen tracking at 2.5-2.6% Y/Y, broadly in line with the 2.5% Y/Y consensus before most of the national inflation data was released since yesterday (down from 2.8%Y/Y in January). In particular, analysts noted stickiness in services inflation, which is considered to be a key obstacle considering ECB rate cuts in the course of 2024.

Some highlights from sell side tracking estimates below (sorted core high to low):

• RBC: Core 3.2% Y/Y "meaningfully overshoots relative to our and consensus expectations [...] main surprise looks to be the resilience of services inflation" but acknowledges uncertainty, headline 2.6% Y/Y "only modestly above our pre-release expectations".
• Citi: Core 3.1% Y/Y "much stronger", headline 2.6% "a tad stronger than expected"
• MS: Core 3.1% Y/Y, headline 2.6% Y/Y "resilience we expected for euro area core and services inflation, above consensus, has materialized"
• Barclays: Core 3.0% Y/Y, headline 2.5% Y/Y, with risk of rounding to 2.6 rather 2.5
• UniCredit: Core 3.0% Y/Y "if not slightly higher [...] services prices seem to have remained quite sticky", headline 2.5% Y/Y "risks are tilted towards a 2.6% print"
• Danske: "country data released before the deadline of this publication shows that core inflation was sticky in February and the monthly momentum is too high, especially in services"