February 03, 2023 10:00 GMT
Core PPI Records First Negative M/M Since May '20
EUROZONE DEC PPI +1.1% M/M (FCST -0.4%); NOV -1.0r% M/M
EUROZONE DEC PPI +24.6% Y/Y (FCST +22.4%); NOV +27.0r% Y/Y
- Eurozone factory-gate inflation disappointed in the December data, only stepping down 2.4pp to +24.6% y/y, as prices accelerated by +1.1% m/m (vs -0.4% expected).
- This headline print will be distorted to the upside, due to the marked +43.2% m/m jump in Irish PPI, largely driven by a surge in wholesale energy prices.
- Overall energy prices accounted for the bulk of upwards pressure on the month, accelerating by +2.5% m/m (likely largely Ireland-driven), followed by nondurable consumer goods at +0.5% m/m.
- Ex. energy, December core PPI uptick cooled by -0.1% m/m and eased by 0.9pp to +12.3% y/y. Despite marginal, this was the first deflationary M/M reading since May 2020.
- This data cautiously signals downwards pressure on the ECB's closely eyed core CPI print to come.
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