INDIA: Nifty 50 Ends Record-Breaking Losing Streak, INR Firmer Amid USD Weakness

Italian January flash HICP was higher than expected at 1.7% Y/Y, (vs 1.4% consensus and prior). On a monthly basis it was -0.7% M/M (vs -1.1% consensus, 0.1% prior). The higher-than-expected print was a large reason for the Eurozone-wide inflation estimate printing slightly above consensus, with the two released at the same time. It combined with last week's releases revealing a small beat for Spain, a small miss for France and Germany as expected. 

The increase in Italian headline HICP reflected Y/Y acceleration in energy and 'Food, alcohol and tobacco' sub-components whilst services moderated slightly:

• Energy rose (though remained in deflation) to -0.7% Y/Y (vs -2.7% prior) - making it the highest since August 2023.
• Food, alcohol, and tobacco HICP is estimated to have risen to 2.4% Y/Y in January (vs 2.1% in December).
• Services slowed slightly to 2.8% Y/Y (vs 2.9% in December), the lowest since April 2022, though still firmly above the pre-pandemic levels. The latest moderation comes despite the European Commission Survey seeing the share of firms expecting services prices to increase in the months ahead rising to +8.2 in January from +7.4 in Dec and -0.4 in October for its highest since Mar 2024.
• Non-energy industrial goods (core goods) were estimated to rise 0.1% Y/Y for the second consecutive month. 

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