On October 2 at 12:00 MSK, the preliminary estimate of consumer inflation in the eurozone for September was released. The headline index rose by 3.8% year-on-year against a forecast of 3.7% and 3.2% a month earlier. The data came in slightly above market expectations.
What the numbers showed
Consumer prices rose by 0.6% month-on-month. The forecast was +0.5%, and in August the increase was +0.4%. In annual terms, inflation accelerated to 3.8% against the expected 3.7%. Core CPI came in at 2.5% year-on-year, fully matching the forecast. A month earlier, the figure stood at 2.4%.
What CPI is
CPI is the consumer price index, which shows how the cost of goods and services for the population changes. Core CPI excludes food and energy, whose prices usually change more sharply. It is the headline and core inflation figures that central banks use when assessing price pressure and rate decisions. The current data are a preliminary estimate. They will be revised later.
What's inside the report
Headline inflation accelerated by 0.6 percentage points at once, from 3.2% to 3.8%. At the same time, the core figure rose by only 0.1 percentage points, from 2.4% to 2.5%. This means that the main contribution to the acceleration came from more volatile components, while the persistent part of inflation changed much less. At the same time, the headline figure of 3.8% remains noticeably above the ECB's 2% target.
Why this matters for the ECB
Data above forecast reduce the room for rapid monetary policy easing. If inflation continues to hold above target, the ECB will have to keep tight conditions in place longer. At the same time, core inflation matched expectations, so the market will look not only at the headline figure but also at the further dynamics of persistent price pressure.
What's next
EUR/USD, DXY, European stock indices and gold remain in focus. Macroeconomic releases of this magnitude often trigger the main move in the first minutes after the data is released. The further reaction will depend on how the market recalculates expectations for the ECB rate and how sustained the acceleration in inflation turns out to be.
Do you trade for half an hour around data releases?
Releases like CPI provide a known-in-advance time of heightened volatility, but trading rules in prop programs differ. In some programs, news trading is allowed; in others, trades directly during the data release are restricted. Daily drawdown is also calculated differently. It's better to check this before buying a challenge, not after violating the account terms.