Commerzbank projects core inflation will breach 3% as energy costs permeate the broader economy, signaling a potential shift in ECB policy stance for the coming year.
Euro area headline inflation rose to 4.0% in October, the highest in three years, while core held at 2.5%. Commerzbank expects energy pass-through to push core toward or above 3%, raising the chance of an ECB hike next year, which supports the euro. The steady core rate and a hike only potentially next year temper the signal.
Headline inflation rose to 4.0% in October, the highest in three years, while core inflation was steady at 2.5%.
Commerzbank says higher energy costs may push core inflation toward or above 3% and potentially force an ECB hike next year.
Higher euro-area inflation and the prospect of an ECB hike next year argue for higher benchmark euro-area yields. Headline inflation at 4.0% is the highest in three years, and Commerzbank sees core moving toward or above 3%. The article gives no bond-specific figure and core is still 2.5%, so the yield signal is indirect.
Commerzbank sees inflation pressures that could force an ECB rate hike next year, which would typically push benchmark euro-area yields higher.
No, the article discusses inflation and ECB policy risk but does not give a specific Bund yield level or forecast.
Euro area headline inflation climbed to a three-year high of 4.0% in October, while core inflation remained steady at 2.5%. Commerzbank analysts warn that persistent energy price pass-throughs could push core inflation above 3%, potentially forcing the European Central Bank to initiate rate hikes next year.
Headline inflation rose to 4.0% in October, the highest in three years, while core inflation was steady at 2.5%.
Commerzbank says higher energy costs may push core inflation toward or above 3% and potentially force an ECB hike next year.
Commerzbank sees inflation pressures that could force an ECB rate hike next year, which would typically push benchmark euro-area yields higher.