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BMO Isn't Sure How This Week's Eurozone CPI Will Change ECB Thinking

BY MT Newswires | ECONOMIC | 01/05/26 10:00 AM EST

10:00 AM EST, 01/05/2026 (MT Newswires) -- This week's German consumer price index for December is expected to slow to 2.2% year over year, which comes on the heels of November's surprising nine-month high of 2.6%, said Bank of Montreal (BMO).

The bank noted it will keep an eye on core CPI, too, which was at a four-month high of 2.7% year over year.

So far, investors have seen Spain's CPI ease to a three-month low in December, but at 3.0%, is still well above target, stated BMO.

The bank isn't clear how a stickier or, alternatively, less sticky reading for the eurozone as a whole -- due out on Wednesday -- will change the European Central Bank's thinking. The Governing Council does have concerns about growth, but many are comfortable with "full optionality" and no one is recommitting to any rate path.

Investors will also see on Thursday the ECB's three-year CPI expectations survey for November, which has been fairly steady at around 2.5%, added the bank.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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