Eurozone December preliminary CPI +2.0% vs +2.0% y/y expected

• Prior +2.1%
• Core CPI +2.3% vs +2.4% y/y expected
• Prior +2.4%

Headline annual inflation eased slightly to hit the 2% mark with core annual inflation also easing marginally. Still, it’s no time to celebrate just yet and the ECB knows that very well. Services inflation remains the key sticking point, coming in at 3.4% in December. That is slightly better than in November (3.5%) but remains well above what it was from the middle of last year (around 3.2%). On the month itself, services inflation moved up by 0.7%.

All of this continues to point towards the narrative that the ECB won’t feel the rush nor the pressure to act any time soon. That especially since the German economy is still flagging in the meantime while waiting for the fiscal kick with inflation pressures still largely persisting in the region’s largest economy.

So, carry on as you will as the ECB will be staying on the sidelines for the foreseeable future.

EUR/USD holds little changed on the day at 1.1686 with not much appetite among major currencies today. The dollar is pretty much trading flattish across the board as we await the US ADP employment change and ISM services PMI later in the day.

This article was written by Justin Low at investinglive.com.