Justin had the bombshell German CPI data on Monday:
- Germany December preliminary CPI +2.6% vs +2.4% y/y expected
- For some context, it was at 2.7% back in September. Stagflation much?
Ugh.
To emphasize the jump in inflation, Spain's December CPI also came in faster-than-expected price at 2.8% (2.6% expected)
This is going to cast doubt on the pace of expected European Central Bank rate cuts in 2025. Pricing is currently for around 100 basis points of cuts in 2025. EUR/USD rose on Monday with all this.
Lagarde
