Broad-based Moderation in October Inflation Momentum

MNI's calculations indicate core, services, non-energy industrial goods and food momentum moderated further in October. Core (ex-energy/food) momentum printed at 3.25% 3M/3M SAAR (down from 3.66% in September and the lowest since December 2021).

• Services saw a more muted fall than in September to 3.85% (vs 3.99% prior), while non-energy industrial goods fell more markedly to 2.27% (vs 3.13% prior). Of the largest Eurozone economies, sequentially increasing services inflation in France was the most prominent outlier in the overall disinflationary trend.
• The headline Eurozone HICP momentum print rose on the month to 4.51% (vs 4.06% prior), but this was likely due to some energy components re-accelerating in the last 3 months, given the downward moves in other sub-components.
• On a seasonally adjusted basis per the ECB, core printed at 0.10% M/M (vs 0.16% prior), the slowest since April 2021 and below the ECB's 2% target on an annualised basis for a second month in a row. Services ticked up slightly to 0.30% M/M (vs 0.27% prior) while non-energy industrial goods fell -0.21% M/M (vs -0.01% prior).
• Leading indicators such as PPI, import prices and PMIs suggest further weakness ahead for core goods, while continued services disinflation will be seen as key in keeping overall core at a low level - particularly as higher fuel prices and wages keep input costs elevated.