The Eurozone February flash inflation round is spread across three days, with Spain kicking off proceedings on Thursday.
- The Eurozone February flash inflation round is spread across three days, with Spain kicking off proceedings on Thursday (Feb 27), before France, Italy and Germany report figures on Friday (Feb 28). Together, the four major economies should give a good read on price pressures ahead of the Eurozone-wide print on Monday (Mar 3).
- There is not yet a Bloomberg consensus for the Eurozone data, but analyst forecasts compiled by MNI point to a pullback in headline and core inflation to 2.3% (vs 2.5% prior) and 2.6% (vs 2.7% prior) respectively.
- The ECB’s confidence in the 2025 inflation outlook has been predicated on an easing of labour costs which should filter through into lower services inflation readings. In a recent hawkish interview with the FT, ECB Executive Board member Schnabel suggested services inflation “should start to come down in February”. However, analysts only expect a moderate deceleration to 3.8% Y/Y from 3.9% prior.
- The February flash inflation round shouldn’t impact market pricing for the ECB’s March 6 decision, with a 25bp fully priced well embedded into analyst (and presumably policymaker) consensus. However, a lack of progress on core metrics may still leave Q2 pricing vulnerable if hawks’ (led by Schnabel) bargain for a more cautious approach to future easing after a March cut.
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