European inflation in October: French and Spanish CPI in line, German wholesale prices up 8.8%
French annual inflation was 3.4% in October and Spain's 4.9%, both matching forecasts. German wholesale prices rose 8.8% year on year, though the monthly increase slowed to 0.4% from 1.9%.
Contents
Inflation data from three of the eurozone's largest economies came out today. Every CPI figure matched forecasts, but German wholesale prices are still showing high annual growth.
Germany: wholesale price index (October)
| Indicator | Actual | Forecast | Previous |
|---|---|---|---|
| m/m | 0.4% | 0.4% | 1.9% |
| y/y | 8.8% | — | 8.7% |
Monthly growth slowed from 1.9% to 0.4%, but the annual rate edged up to 8.8%. Wholesale prices usually feed through to consumer prices with a lag.
France: preliminary CPI (October)
| Indicator | Actual | Forecast | Previous |
|---|---|---|---|
| m/m | 0.4% | 0.4% | 0.4% |
| y/y | 3.4% | 3.4% | 3.4% |
Spain: final CPI (October)
| Indicator | Actual | Forecast | Previous |
|---|---|---|---|
| m/m | 0.6% | 0.6% | 0.6% |
| y/y | 4.9% | 4.9% | 4.9% |
| Core y/y | 3.1% | 3.1% | 3.1% |
Why it matters for markets
With no surprises in the French and Spanish numbers, this data alone is unlikely to move the euro much. Still, annual inflation of 3.4% in France and 4.9% in Spain, together with 8.8% growth in German wholesale prices, shows price pressure in the eurozone remains well above the ECB's 2% target. That leaves little room for the ECB to cut rates.
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