According to data published on Tuesday, inflation in the euro area accelerated in November by 2.2 percent from the previous year. A market data company Bloomberg’s the consensus forecast collected by economists estimates that inflation will accelerate by 2.1 percent from the previous year. In October, inflation was 2.1 percent.
In November, the consumer price index of the euro area decreased by 0.3 percent compared to October. The consensus predicts a decrease in consumer prices by 0.3 percent compared to the previous month. In October, consumer prices rose by 0.2 percent from the previous month.
Core inflation in the euro area was 2.4 percent in November. Economists predict that core inflation will accelerate by 2.4 percent from the previous year, which was also the reading for October.
OP’s senior market economist Jari Hännikäinen comment on Tuesday’s message service Xthat the figures give the ECB additional reasons to continue with a stable monetary policy line at the December meeting.
Hännikäinen also estimates that the inflation picture is calm in light of current information, but there is also the possibility of surprises. Surprises can come from, for example, energy prices or the geopolitical situation.
On Tuesday, it was also reported that the unemployment rate in the euro area remained at 6.4 percent.
Interest rate hikes are expected in Japan
In Japan, interest rates on government bonds were on the rise yesterday, Monday, the governor of the central bank Kazuo Uedan hinted that the central bank could raise interest rates in December. The effect was also reflected in interest markets in other parts of the world.
On Tuesday, the movements of government bonds had leveled off.
The Japanese yen weakened against other currencies on Tuesday.
At the time of review on Tuesday, the interest rate on the US ten-year government bond was 2.1 percentage points higher at 4.108 percent. The interest rate on the two-year government bond was 0.0 percentage point higher at 3.531 percent.
In Germany, the interest rate on the ten-year government bond rose by 1.2 percentage points to 2.759 percent. The interest rate on the two-year government bond was 0.0 percentage point higher at 2.058 percent.
In the United States, an interest rate cut is expected next week, when the market is pricing the probability of the Fed’s interest rate cut already at 85 percent.
At 2:41 p.m., one euro was worth 1.16 dollars, 181.21 yen, 0.88 pounds and 10.98 Swedish kronor. The dollar was 156.02 yen and the pound was 1.32 dollars.
Futures predict a bullish opening for Wall Street on Tuesday. At the time of review, the Dow Jones index future was up 0.2 percent, the S&P 500 future was up 0.2 percent, and the Nasdaq future was up 0.4 percent.