13 February 2014

Eurozone lurches towards deflation

​Last week’s inflation data showed consumer prices in the Eurozone rose by only 0.7 percent in January against the 0.9 percent estimated — accelerating concern about deflation in the single currency zone.

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Last week’s inflation data showed consumer prices in the Eurozone rose by only 0.7 percent in January against the 0.9 percent estimated — accelerating concern about deflation in the single currency zone.


The European Central Bank (ECB) will once again move into crisis mode as deflation, the overall high EURUSD and new emerging market crisis almost guarantees that the bank's growth and inflation forecast will undershoot.

Steen Jakobsen, Chief Economist at Saxo Bank, predicts the ECB will cut rates by 15 basis points and take the deposit rate to slightly negative at its next Governing Council meeting. This could even happen outside the regular scheduled ECB meetings if the emerging market crisis continues.

How will markets react to the latest inflation data? Are we about to see a multi-year breakout for EURUSD?​



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The value of your investments can go down as well as up.
Losses can exceed deposits on margin products. Please ensure you understand the risks.