Eurozone Inflation Remains Muted


Eurozone Feb HICP inflation was confirmed at 1.5% y/y, up from 1.4% y/y in the previous month. The core rate was confirmed at 1.0% y/y, down from 1.1% y/y in January, highlighting that energy price variations were the main reason for the uptick in the headline rate. In fact excluding energy inflation remained steady at 1.3% y/y. The data confirms that underlying inflation remains low, which ties in with the ECB’s updated forecasts. After Draghi reacted to the weaker outlook and pushed out the timing of the first rate hike, while announcing a new round of TLTRO loans, the current inflation numbers won’t have an immediate impact on the policy outlook, although they will vindicate the doves at the council.

EURUSD has support at the daily pivot point and 20-period moving average at 1.1310 and the psychological 1.1300. The daily R1 at 1.1330 has proved too ambitious so far today. The Crossing EMA strategy moved lower during yesterday, falling from 1.1317 and finding resistance to the move lower at 1.1300. It triggered higher during the Asian session today at 04:00 and 1.1309.


Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.