French Inflation Edges Down Slightly to 3.4% YoY in Dec. on Easing Energy Prices

Source: Bloomberg

French inflation steadied in December, signaling price pressures might have come close to the peak in the eurozone after surging on energy costs in the last few months. ENX down -1.40%, EUR USD down -0.11%

• The 3.4% year-on-year increase posted in the eurozone’s second-largest economy was slightly smaller than the initial estimate of 3.5% by economists.
• The weight of inflation gave the European Central Bank more opportunity to come up with a course out of exceptional monetary stimulus at a meeting last month.
• The first course of action plotted by policymakers will mark the end of net asset purchases under the emergency program in March with a short-term boost to regulate bond purchases.
• France’s December inflation report indicated a slowdown in increasing energy costs offsetting an increase in food and manufactured goods.
• Inflation in services dropped down slightly to 1.8% from 1.9% in November.
• Even though France shows signals of overcoming surging prices, southern European economies are still grappling with high inflation rates.