Core HICP Jumps 0.3pp to Fresh Euro-High

EUROZONE FEB FLASH HICP +0.8% M/M (FCST +0.5); JAN -0.2% M/M

EUROZONE FEB FLASH HICP +8.5% Y/Y (FCST +8.3%); JAN +8.6%Y/Y

EUROZONE FEB FLASH CORE HICP +5.6% Y/Y (FCST +5.3%); JAN +5.3%Y/Y

EUROZONE JAN UNEMPLOYMENT 6.7%; DEC 6.7%r

• Eurozone HICP surprised to the upside in the flash February data, whereby the 0.3pp acceleration in core HICP to +5.6% y/y will strongly underline hawkish sentiment at the ECB.
• HICP for the bloc accelerated by +0.8% m/m, slowing a modest 0.1pp to +8.5% y/y.
• Only energy eased in the main inflation categories. The 0.4pp increase in services inflation to +4.8% y/y will have been a key upwards driver to annualised core.
• The aggregate print follows higher-than-anticipated French, German and Spanish data in the past days.
• The January euro area unemployment rate was 6.7%, stable against the upwardly revised December print. This remains only 0.2pp above October's historic low, implying continued labour-market tightness and continued upward pressure on wages, a key concern to the ECB as core inflation continues to accelerate.