GERMAN AUCTION PREVIEW: On offer next week

• The ECB's Consumer Expectations Survey (CES) showed the 1-year ahead reading rose for the third consecutive month to 2.6% Y/Y in November (vs 2.5% in October) making it the highest since August 2024.
• The 3-years ahead expectation jumped up to 2.4% Y/Y from 2.1% in October - returning in-line with July 2024's high.
• The survey doesn't have pre-pandemic readings but this three-year measure remains above the 1.9-2.1% readings mostly seen through mid-2020 to early 2022 before jumping to a survey high of 3.1% in Oct 2022.
• Also of note, the mean expectation for economic growth over the year ahead deteriorated further to -1.3% in November (vs -1.1% prior).
• See the full press release here.

Eurozone December flash headline, on a rounded basis, came in in line with consensus at 2.4% Y/Y (2.4% cons; 2.2% prior). After the already-published national releases out (particularly Germany) there was a risk of a 2.5% print. However, Italy data came in below consensus at 1.4% Y/Y vs 1.6%Y/Y expected and this likely brought us back to the 2.4%Y/Y print.

• On a monthly basis, inflation came in at 0.4% (vs 0.4% cons; -0.3% prior).
• On an unrounded basis, headline HICP was 2.44% Y/Y and 0.36% M/M.
• Core HICP also printed in line with consensus, at 2.7% Y/Y (2.7% cons and prior; unrounded: 2.71% Y/Y, 0.45% M/M).
• Looking at the individual categories:
  • Energy moved into positive territory for the first time since July, at +0.1% Y/Y (-2.0% Nov, -6.1% Sep) on the back of both a 0.6% sequential increase and base effects.
  • Services inflation increased slightly, remaining sticky, at 4.0% Y/Y (3.9% prior). It has remained around the 4% level for over a year now.
  • Non-energy industrial goods inflation decreased slightly, to 0.5% Y/Y, remaining overall soft (vs +0.6% Oct).
  • Food, alcohol and tobacco inflation meanwhile remained unchanged at 2.7%.
• Looking at the national-level prints, headline HICP inflation remained stable or accelerated in all but 4 countries in December (Greece, Italy, Malta, Slovakia).

EURUSD (7th Feb) 1.0100p sold at 0.0015 and 0.0014 in 2.5k.