Euro area: Inflation data to stay in the limelight for next two days - Nomura

Research Team at Nomura, suggests that Euro area, German, French, Spanish and Italian preliminary September inflation data will be the main economic releases today and tomorrow.

Key Quotes

“We forecast the flash estimate of euro area HICP inflation to accelerate to 0.6% y-o-y in September, the highest reading since April 2014, following a reading of 0.2% y-o-y in August. This month’s acceleration in the headline inflation rate is predominantly driven by the boost from the positive energy price effect adding around 0.2pp to the headline. Furthermore, a monthly increase in the energy prices should further add close to 0.1pp to the headline annual inflation rate. Aside from energy prices, additional support for acceleration in the headline HICP should come from the volatile sub-components of core inflation (e.g. clothing). This should also push core inflation up to 1.0% y-o-y in September following a slowdown to 0.8% y-o-y in August.

At the country level, we forecast the flash estimate of German HICP inflation (29 September) to increase 0.1% m-o-m and 0.6% y-o-y in September from -0.1% m-o-m and 0.3% y-o-y in August (the preliminary CPI reading to increase 0.1% m-o-m and 0.7% y-o-y in September after 0.0% m-o-m and 0.4% y-o-y in August).

Elsewhere, we expect the French preliminary HICP reading (30 September) to show headline inflation accelerating to 0.7% y-o-y in September after 0.4% y-o-y in August. In Spain, we expect headline HICP inflation to increase to 0.4% y-o-y from -0.3% y-o-y, while in Italy we forecast September HICP inflation at 0.2% y-o-y.”