French and Dutch Inflation Point To Further Downside In EZ Print

The latest set of national November flash inflation prints from France and the Netherlands came in below consensus, continuing yesterday's narrative that EZ inflation is likely to come in lower than expected at 1000GMT today.

In France, CPI was 3.4% Y/Y and -0.2% M/M (vs 3.7% Y/Y and 0.1% M/M cons) while HICP was 3.8% Y/Y and -0.3% M/M (vs 4.1% Y/Y and 0.0% M/M cons).

• The fall in headline was driven primarily by services (particularly transport) and energy. Services prices rose 2.7% Y/Y (vs 3.2% prior), while energy prices fell to 3.1% Y/Y (vs 5.2% prior). Non-energy industrial goods prices rose 1.9% Y/Y (vs 2.2% prior).
• Monthly rises in unprocessed foods meant that the disinflation in overall food prices was smaller (7.6% Y/Y vs 7.8% prior) than major components.
• The release does not contain information on core CPI/HICP, but the disinflation in core components suggests further softening from the 3.5% Y/Y core (ex-energy/food) HICP rate in October.

Dutch November flash HICP was 1.4% Y/Y (vs 1.6% cons, -0.4% prior), with NSA prices falling -1.5% on the month.

• Core CPI was seen falling 1pp to 4.1% Y/Y (vs 5.1% prior), from a peak of 8.1% in February and March 2023. CPI is estimated at 1.6% Y/Y (vs -0.4% prior) and -1.1% M/M, with slightly smaller energy base effects pushing the Y/Y rate back into positive territory (energy inflation was -25.3% Y/Y vs -40.2% prior).
• Looking at the core components, services disinflated to 4.0% Y/Y (vs 4.7% prior), while non-energy industrial goods fell to 2.6% Y/Y (vs 3.4% prior).