No surprises from headline euro-zone inflation: it picked up from -0.1% to 0%, following Germany’s lead. However, core inflation surprised with a rise to 1%, from 0.9% seen beforehand. Also the unemployment rate provided a positive surprise with a drop down to 10.8% from 11%.
EUR/USD remains stable around 1.10 and so far does not react to the improvements.
The euro-zone was expected to report a 0% change y/y in the headline Consumer Price Index in the preliminary read for October. In September, it slipped back to deflation with -0.1%. Core CPI was expected to remain unchanged at +0.9%. The unemployment rate carried expectations for the same 11% once again.
EUR/USD struggled with 1.10 towards the release.
Expectations became a bit higher thanks to stronger German numbers reported yesterday. German inflation data was +0.1% higher on all fronts. However, Spain’s early release missed expectations.
EUR/USD is making an attempt to recover from the two central bank moves: Draghi’s dovishness last week and the Fed’s hawkishness on Wednesday. It’s also the end of the month and some last minute scrambling may be skewing the trading levels at the moment.
More: EUR/USD to 1.06 by year end as the ECB Looms – CIBC
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