Eurozone: Deflation may not prompt ECB for further easing – BBH

FXStreet (Delhi) – Research Team at BBH, suggest that the ECB officials had warned of the risk of a negative CPI print, so they were likely not surprised by the news of Eurozone falling into deflation and this in turn suggests that this news may not be sufficient to spur the ECB into altering its asset purchase purchases when it meets next month (October 22).

Key Quotes

“Today, investors learned that deflation returned to EMU in September for the first time since March. The dramatic slide in Spanish prices and softer than expected German CPI yesterday gave strong hints of disappointment today and surveys were not readjusted to incorporate that information. Energy prices are likely the main culprit, as core inflation was steady at 0.9%.”