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EUROPEAN INFLATION: Sequential DE Services CPI Estimated Softer

EUROPEAN INFLATION
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German national level CPI data suggests core momentum decelerated in November on a seasonally-adjusted basis, MNI estimates, and services momentum was also lower than in October.

  • Specifically, we estimate SA core inflation to be broadly around 0.17% M/M (0.43% prior), services inflation at around 0.22% M/M (0.35% prior), and headline at around 0.04% M/M (0.50% prior).
  • In annualized terms, this would imply core inflation broadly around 2.1%, services at around 2.7%, and headline inflation broadly around 0.4%.
  • The implied 0.22% current services inflation pace compares favourably with a 0.30% average sequential increase YTD. Assuming that goods inflation returns to comfortably below target levels, services at 2.7% annualised may not be that inconsistent with a target for headline inflation of 2%.
  • All of these figures have been derived from a top down very simple seasonal adjustment. The estimates are therefore not as comprehensive as the Bundesbank's seasonally-adjusted sequential figures to be published later this afternoon. However, our seasonal adjustment estimates tend to give a decent indication on the direction of travel. Furthermore, the Buba estimates will provide more detail, including on core goods.
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German national level CPI data suggests core momentum decelerated in November on a seasonally-adjusted basis, MNI estimates, and services momentum was also lower than in October.

  • Specifically, we estimate SA core inflation to be broadly around 0.17% M/M (0.43% prior), services inflation at around 0.22% M/M (0.35% prior), and headline at around 0.04% M/M (0.50% prior).
  • In annualized terms, this would imply core inflation broadly around 2.1%, services at around 2.7%, and headline inflation broadly around 0.4%.
  • The implied 0.22% current services inflation pace compares favourably with a 0.30% average sequential increase YTD. Assuming that goods inflation returns to comfortably below target levels, services at 2.7% annualised may not be that inconsistent with a target for headline inflation of 2%.
  • All of these figures have been derived from a top down very simple seasonal adjustment. The estimates are therefore not as comprehensive as the Bundesbank's seasonally-adjusted sequential figures to be published later this afternoon. However, our seasonal adjustment estimates tend to give a decent indication on the direction of travel. Furthermore, the Buba estimates will provide more detail, including on core goods.