Euro area: Inflation set to rise to a three-year high – SocGen

Analysts at Societe Generale suggests that data this week should continue to point to a resilient recovery in the euro area and inflation data are expected to show oil prices having a more decisive impact on inflation.

Key Quotes 

“Headline inflation expected to have risen to 1.1% yoy in December, a 39-month high. Core inflation should however remain stable at 0.8% (watch for surprises in French and German CPI data on Tuesday). Final December PMIs should be broadly stable, at a high level consistent with GDP growth of nearly 0.5% qoq in 4Q16, while European Commission survey data should rise slightly further. Unemployment data in Germany and Spain should improve further, while factory orders in Germany could have dropped rather sizably in November, following a strong rise in October.”