Prior +1.2%HICP +1.0% vs +1.0% y/y prelimPrior +1.2%Slight delay in the release by the source. Looking at the details, services inflation is the one that is keeping higher at 2.5% last month. Meanwhile, goods price inflation is actually recording a -0.2% annual change. Overall, that leaves core annual inflation at 1.7% in Italy to start the year. And that’s sort of the spot that the ECB wants to get inflation to as a whole for the region.
This article was written by Justin Low at investinglive.com.
đź’ˇ DMK Insight
Core inflation’s mixed signals are crucial for traders navigating interest rate expectations right now. With services inflation holding at 2.5% while goods prices dipped 0.2%, the Fed’s next move could hinge on these dynamics. If services inflation continues to rise, it could pressure the Fed to maintain or even raise rates, impacting both forex and crypto markets. Traders should keep an eye on the upcoming FOMC meeting for potential shifts in policy. A sustained core inflation above 2% could signal a tightening cycle, affecting risk assets like equities and cryptocurrencies. Watch for any shifts in sentiment around the 2% inflation target, as this could lead to volatility across markets, especially if traders react to perceived hawkishness from the Fed.
đź“® Takeaway
Monitor core inflation trends closely; a sustained rise above 2% could trigger significant market volatility, particularly in forex and crypto assets.





