Focus on CPI and Unemployment Data
Currency Strategist at RBC Capital Markets, Elsa Lignos, suggests that markets the eurozone will focus this week will be on the release of unemployment data and CPI, which are both on Friday.
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The effects of falling energy prices begin to fall earlier in the HICP in the coming months, so that headline inflation will begin to pick up as a result. The drag of the two main categories affected the inflation basket (transport and home heating) has already begun to give way, and that process should accelerate in the first half of next year. As a result, we see the September HICP print at 0.4% y/y, but with core inflation remaining unchanged at 0.8%.
Meanwhile, the rate of decline in unemployment in the eurozone has moderated in recent months, although the overall trend remains low. As a result, we see an unemployment rate unchanged in August at 10.1%, representing the fifth consecutive month of no change.