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7 Jan 2015
Euro inflation expected to drop into negative territory – Danske
FXStreet (Barcelona) - The Danske Bank Research Team anticipates Euro inflation to drop into negative territory at -0.1%yoy in December, driven largely by lower energy prices.
Key Quotes
“Euro Flash inflation is expected to drop to -0.1% y/y for December from 0.3% y/y in November. It is mostly driven by energy prices as core inflation is expected to be flat at 0.7% y/y. We expect euro inflation to be in negative territory until this autumn, which clearly raises the risk of a de-anchoring of inflation expectations. It thus seems clear that the ECB has to respond and there is a rising probability that it will announce QE in government bonds at the coming meeting on 22 January.”
Key Quotes
“Euro Flash inflation is expected to drop to -0.1% y/y for December from 0.3% y/y in November. It is mostly driven by energy prices as core inflation is expected to be flat at 0.7% y/y. We expect euro inflation to be in negative territory until this autumn, which clearly raises the risk of a de-anchoring of inflation expectations. It thus seems clear that the ECB has to respond and there is a rising probability that it will announce QE in government bonds at the coming meeting on 22 January.”