MNI Eurozone Inflation Preview - January 2025

January Price Resets To Set The Tone For 2025

• The Eurozone January flash inflation round is split across two weeks, with Spain, France and Germany providing data on Thursday/Friday (Jan 30-31), before Italy and the Eurozone-wide prints cross on Monday.
• The data will set the tone for inflation developments through the rest of this year, with the annual basket reweighting taking place alongside regular annual price resets in several categories.
• The MNI median of sell-side forecasts points to headline at 2.4-2.5 % Y/Y (vs 2.4% prior) and core to remain at 2.7% Y/Y.
• Headline inflation is likely to be upwardly impacted by an acceleration in Brent crude and natural gas prices in January, while services inflation remains in focus for the core measure.
• The ECB are considered near-certain to cut rates by 25bps at its January 30 meeting, with a subsequent 25bp cut in March almost fully priced - but there remains uncertainty around the speed and magnitude of cuts beyond Q1, with inflation data a key input into those decisions. 

PDF Analysis Here:

January2025EZCPIPreview.pdf