Inflation data comes back into focus in European trading today

Inflation data is back on the menu but in all likelihood, it won’t do much to change the ECB outlook. As things stand, the central bank is left hanging with markets also not anticipating any interest rate moves for the year. Amid stagflation risks that could crop up, particularly in Germany, policymakers are staying vigilant and watchful awaiting the next trend in economic developments.

So for now, the inflation trend holding as it is will do little to compel the ECB to really get off their seats and take any form of action.

The French report later is estimated to see headline annual inflation keep as it is in November, at 0.9%. Core annual inflation for November was seen at 1.0%, nudging down from 1.2% in October. So, this spot is one of the softer side so to speak when it comes to the inflation narrative in the euro area.

But just take note that when we get to the January 2026 readings next month, INSEE will be changing the reference year to the consumer price index i.e. rebasing. The base year will turn to 2025, so that could result in the annual inflation readings being a little lower even if prices have been rising steadily. Just keep that in mind.

As for the German report later, the estimates point to a cooling in headline annual inflation. The expectation is for a 2.1% reading, down from 2.3% in November. But again, the core annual inflation estimate is the more important detail to look out for. And that stood at 2.7% in November, just a little down from 2.8% in October. It’s still on the higher side though, keeping stubborn above the 2% threshold.

Here’s the agenda for today for the German state CPI releases:

0930 GMT – North Rhine Westphalia0900 GMT – Brandenburg0900 GMT – Hesse0900 GMT – Bavaria0900 GMT – Saxony1300 GMT – Germany national preliminary figures

Do note that the releases don’t exactly follow the schedule at times and may be released a little earlier or later.

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