Archive

March 02, 2021
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EA: Flash HICP as flat as a spring pancake

  • Flash HICP inflation was 0.9% y-o-y in Feb-21, unchanged from January and in line with our forecast and the final consensus. Non-energy industrial goods balanced downside news in energy prices. Our HICPxT forecast for Feb-21 is close to rounding up from 0.8%.
  • Weighting changes for 2021 are set to continue distorting data through at least 2021, likely causing multiple surprises. The Jan-21 one should ward-off an ECB rate cut.

February 23, 2021
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EA: echoes from inflation’s remix

  • Jan-21 inflation was confirmed at 0.9% y-o-y in the euro area, with the ex-tobacco index at 0.8%, as expected. Weighting changes caused 44bps of the 118bp EA rise, but the shock washes out in our forecast for the annual rate in Dec-21.
  • Each of the next three monthly inflation rates is depressed by the new basket weights with only three releases currently rounding to an impact less than 0.1pp in 2021. Shocks will inevitably shift the magnitudes and the consensus is set to suffer regular surprises.

February 18, 2021
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Sweden: CPIF jumps into its new basket

  • CPIF inflation was 1.7% in January 2021, up from 0.5% in December.
  • Larger than usual shifts in spending patterns during 2020 caused the basket weight of services like air travel to fall, while those of products like home electronics have risen.
  • The Riksbank is likely to look through any pandemic related volatility in CPIF inflation.