Eurozone Inflation Tracker: Headline, Core & Energy | Cartesio Macro

Inflation in Europe - what happened so far

EUROZONE

Inflation - Headline & Core

HICP: 2.9%, ELEVATED | Core: 2.5%

EUROZONE

Energy Inflation

VERY HIGH | 10.3%

GLOBAL MARKETS

Commodity Prices

VERY HIGH | 40.2%

Insights

CONCEPT

Here we monitor EU inflation monthly dynamics across Headline (HICP), which is a full consumer basket of goods and services, and Core metrics, which exclude volatile components such as energy and food. We also track daily commodity prices which may feed into inflation numbers. Inflation affects central bank interest rate setting, and subsequently equity and bond performance.

CURRENT READINGS

Headline inflation in Europe currently runs at 2.9% YoY - above target and moving higher - and up by 0.10% since last month. Core inflation is running at 2.5% and rising. Energy prices run at 10.3% YoY, up by 1.80% in the month - high, in the top range of 10-year observations (elevated in historical terms). In parallel, the price of a global basket of commodities is moving up by 40.2% YoY.

MARKET IMPLICATIONS

Realized inflation has been mixed, favoring shorter duration bonds and stocks, while more problematic for longer-duration bonds.

In general terms, inflation is a key variable for investors. Higher expected inflation is bad for bonds, good for commodities and traditional stocks (up to a limit, until it starts destroying consumption). Lower expected inflation is good for bonds and growth stocks.

We observe here realized inflation which has already happened (for market expectations on future prices, go to the breakeven page).