Eurozone CPI set to weaken in November after German, Spanish numbers fall short
2022.11.29 04:34
© Reuters.
By Geoffrey Smith
Investing.com — Inflation in Europe’s largest economy is on track to turn out lower than expected for the first time in months in November.
The federal state of North Rhine-Westphalia, Germany’s largest state by population, said on Tuesday that consumer prices fell 0.8% on the month, a much sharper decline than the 0.2% expected by analysts, and a sharp reversal from October’s 1.2% increase.
North Rhine-Westphalia is typically the first of a handful of large states to report their inflation numbers ahead of a nationwide figure due to be published by Destatis at 08:00 ET (13:00 GMT).
German government bond yields moved sharply lower on the numbers, which hinted at an earlier and lower end to this year’s surge in inflation, and consequently to an earlier end to the European Central Bank’s. The ECB has raised its key rates by 2 percentage points over its last three meetings and its President Christine Lagarde told the EU Parliament on Monday that she didn’t think it has peaked yet.
By 03:10 ET (08:10 GMT), the yield on the benchmark German bond was down 8 basis points at 1.91%, while the more interest rate-sensitive yield was down 13 basis points at 2.05%. That also dragged bond yields down in parallel around the rest of the Eurozone, with slightly larger falls in Italian yields.
Elsewhere in the Eurozone, CPI numbers from Spain also indicated that November’s data may turn out better than expected. The INE statistics office said fell 0.1% according to the national measure of inflation, bringing the rate down to 6.8%, its lowest since February. Spanish inflation peaked in August at 10.8% and the annual rate has now slowed for three straight months.
