Eurozone inflation

ECB bonds

ECB Raises The Bar For Normalisation In The Short-Run, Flexibility Is The Key For Policy

Monex Europe | Today’s announcement by the European Central Bank can be perceived as net dovish in the short-term by markets, as the shift from an asymmetric target to a new symmetric 2% inflation target gives the central bank ample room to run accommodative monetary policy for longer without having to fight markets. Previously, the ECB’s inflation target was set at “below, but close to 2%”, which contributed to the eurozone’s structural issues with low inflation for years. By changing this target to a symmetric target, which means any undershoots and overshoots would be equally undesirable, the central bank moves the bar slightly upwards for inflation before policy is required to tighten.



euro coin

M3 growth in the Eurozone is still higher than the level compatible with 2% inflation

J.L. M.Campuzano (Spanish Banking Association) | The European Central Bank (ECB) published on Thursday the statistics for monetary aggregates in January. In January specifically, the growth rate accelerated to 5.2% per year. This increase in the M3 money supply continues to exceed the theoretical level compatible with medium and long-term inflation of 2%. The main contribution was from credit to the private sector, with an increase of 3.4% over last year.




A world with less inflation

Inflation: A Little Can Turn Out To Be A Lot

Just a couple of years ago, deflation was a concern for US economists. And, although it’s true that this threat has almost disappeared, rises in prices have shown themselves to be surprisingly elusive.

 



Eurozone inflation

Eurozone inflation hits 2% at last- What’s next?

Eurozone inflation increased above the European Central Bank’s target for the first time in four years, Eurostat’s figures showed on Thursday. Inflation accelerated to 2 % in February from 1.8 % in January. A similar higher rate was last seen in January 2013. Markets expected prices to rise 1.9 %.


Eurozone inflation

Eurozone Inflation: With Just A Very Little Help From My Friends

Yes, inflation is a global phenomenon, and inflation moving higher elsewhere will help Euro area inflation. According to BoAML, while the global backdrop will be helping, it will not move the needle enough to sustain inflation beyond the mid-year hump. Analysts think that a gradual improvement in the global output gap will generate a cumulative increase of 5bps in Euro area core inflation.