The Eurozone’s inflation figures, which have the potential to influence various markets including stocks, bonds, and cryptocurrencies like Bitcoin and altcoins, have been released. The Consumer Price Index (CPI) in the Eurozone showed a 2.4% annual increase in November, aligning with the expectations. Core CPI, excluding volatile food and energy prices, also rose by 3.6% on a yearly basis in November, which was anticipated.
The European Statistics Office (Eurostat) announced the inflation data for November, indicating a decrease from 2.9% in October to 2.4%, meeting market predictions. This drop in inflation suggests a potential easing of the European Central Bank’s (ECB) monetary tightening, providing additional support for the rise of risky assets like Bitcoin and altcoins.
Both the annual inflation rate and the core inflation rate in the Eurozone have decreased compared to the previous month, which was in line with market expectations. The core inflation, which measures price changes in goods and services excluding food and energy, had been 4.2% in October.
Lower-than-expected inflation rates in the U.S. markets have led to speculation about the Federal Reserve nearing the end of its monetary tightening cycle, which has significantly boosted risky assets. Similarly, the declining inflation in the Eurozone could signal the end of the ECB’s tightening cycle, potentially encouraging further increases in the prices of cryptocurrencies.
The ECB maintained its three main policy rates unchanged last week, as expected, with refinancing rates at 4.50%, deposit rates at 4%, and marginal lending rates at 4.75%. The ECB also announced a faster reduction in its balance sheet. The ECB’s decision-making will continue to rely on a data-dependent approach, emphasizing the importance of indicators such as inflation figures.