Today’s focus on the macro front is on the euro area inflation data. Inflation remains well above the ECB’s 2% target. The central bank’s fight against soaring prices has still a way to go. President Lagarde said on Monday that inflation likely has not peaked yet and her remarks hinted that the ECB will continue to raise interest rates to tame it. The ECB has raised its three key interest rates by 200 basis points in just three months, the fastest rate hikes since the euro was introduced. All eyes will be on the ECB’s monetary policy meeting on 15 December.
According to Eurostat, the annual consumer price index (CPI) in the euro area reached 10.0% in November 2022. The headline inflation was below market forecasts of 10.4% and the record high of 10.6% in October. Core CPI remained steady at 5.0% for two consecutive months and was in line with market forecasts. Latvia (21.7%), Estonia (21.4%) and Lithuania (21.4%) were among the EU countries with the highest annual inflation rates. Spain (6.6%) and France (7.1%) registered the lowest rates. Prices slowed for energy (34.9%), while prices for food, alcohol & tobacco rose at a faster pace (13.6%). European markets slightly climbed on Wednesday as local investors responded to the data.