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Euro area inflation to flirt with negative, Spain’s rating upgrade likely – Danske Bank

FXStreet (Delhi) – Research Team at Danske Bank, expect the Euro area final CPI to confirm that the headline figure slipped back into negative territory in September (at -0.1% y/y), while core is expected to remain at 0.9% y/y.

Key Quotes

“Hence, pressure for further ECB easing is likely to remain, even as market-based inflation measures have increased slightly (5y5y break-evens are trading around 1.65%, having troughed at 1.56% in late-September).”

“Euro area trade balance data for August is expected to decline, in line with the weak German data seen last week.”

“Spain's 'Baa2' sovereign debt rating may be revised today by Moody's. Following the surprise upgrade by S&P last week to 'BBB+', we believe an upgrade is likely, as Spain is on positive outlook by Moody's. However, there is also the possibility that Moody's remains on hold until after the general election on 20 December.”

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