Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Eurozone inflation jumps to record 10.7 percent

Eurozone inflation jumps to record 10.7 percent

Consumer price growth in the 19 countries sharing the euro accelerated in October, putting pressure on the ECB.

Eurozone government bond yields have risen after inflation data showed consumer prices climbed at a record pace in October, heaping pressure on the European Central Bank to continue aggressive policy tightening.

Consumer price growth in the 19 countries with euro as their monetary unit accelerated to 10.7 percent in October from 9.9 percent a month earlier, Monday’s data showed.

Inflation excluding unprocessed food and energy accelerated to 6.4 percent from 6 percent, while an even narrower measure that also filters out alcohol and tobacco rose to 5 percent from 4.8 percent.

The data points to further rate increases from the European Central Bank (ECB) in an attempt to bring inflation back down towards its target.

“The ECB’s goal of pushing the inflation rate back to just under 2 percent on a sustainable basis seems a long way off,” Commerzbank senior economist Christoph Weil said, noting the ECB forecast inflation at 9.2 percent in the final quarter of 2022.

“This also increases the pressure on the ECB Governing Council to further raise key rates sharply,” Weil added.


Germany’s 10-year yield


By 10:27 GMT, Germany’s 10-year yield, the benchmark for the euro area, was up 6 basis points (bps) to 2.147 percent.

Germany’s two-year yield was up 4 bps to 1.968 percent.

The ECB policy meeting on Thursday had pushed investors to bet on a slower pace of rate hikes, but policymaker comments since the meeting and elevated price pressures suggest the central bank remains in tightening mode.

Money markets are pricing in a 50 bps rate hike at the December meeting, with about 140 bps of further tightening priced in for this cycle, according to data from Refinitiv.

On Sunday, ECB governing council member Klaas Knot helped push back expectations for a slower pace of tightening, saying it was likely the next hike would be a choice of 50 or 75 bps.

Italy’s 10-year government bond yield rose 9 bps to 4.243 percent, pushing the spread between Italian and German 10-year yields wider by 3.5 bps to about 209 bps.


Black Sea grain deal


Eyes were also on the inflationary effect of Russia suspending participation in a UN-brokered Black Sea grain deal.

Chicago wheat futures jumped almost 6 percent on Monday and corn rose more than 2 percent as Russia’s withdrawal from the agreement raised concerns over global supplies.

“Food inflation has been a big deal and any decline in grain shipments from Ukraine is not going to help the inflation issue,” said Lyn Graham-Taylor, senior rates strategist at Rabobank.

“It’s another wrinkle to add to the many inflationary issues out there.”

Looking further ahead, investor focus looks set to turn to the Federal Reserve policy meeting on Wednesday.

The Fed is likely to raise rates by 75 bps at the meeting but is seen slowing the pace of hikes from December.

“We’re of the view that no one is going to be pivoting yet. Any confirmation around that view will be pretty significant,” Rabobank’s Graham-Taylor added.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Hungary Ranked Among the World’s Safest Travel Destinations for 2025
G7 Leaders Fail to Reach Consensus on Key Global Issues
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
×