**As seen in Risk In The Week report 10/27/23, subscribe at cablefxm.co.uk/reports
EU headline consumer prices eased to 4.3% Y/y from the prior 5.2%, price pressures in the region have now slowed to the softest level since October 2021. The prior reading was revised to the upside by 10bps, which meant the September number slowed by one full percentage point, in line with economists' estimates. On a monthly basis, clothing recorded the fastest pace in a year at 0.6%. Housing bills, electricity, and fuels eased from 0.1% to flat M/m, and fuel and gas prices recorded deflationary monthly readings for the fourth consecutive print. EU core CPI printed at 4.5% Y/y vs prior 5.3%, in line with the survey median, both headline and core extended their deflationary trends. A Bloomberg measure of super core inflation fell to 5.42% Y/y, the metric has slowed down every month since March and supports the case for patience from the ECB. Analysts at Nordea noted Madame Lagarde's lack of concern about price pressures during the October press conference. Nordea said that the September inflation print helped to soothe the ECB's worries and their model sees prices returning to target by the end of 2024, they expect the central bank to start cutting rates in June. The desk at BMO noted the ECB hawk camp toning down their bias in recent days, however, they indicated Hoffman's view that it will be very difficult to bring inflation back to 2% unless there is a recession in the euro area.
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