Quotes from Scotiabank:- We've already received the first glimpse of EZ inflation for Dec. Spain reported EU-harmonized CPI at -1.1% y/y which was materially softer than consensus. That's the weakest figure since 2009 during the depths of the global crisis. That's not far from where it is now, with further downside likely in response to lagging influences of lower oil prices that continue to drop. – That's not a pretty look ahead to Monday's inflation figures by individual German states, or Wednesday's figures for Italy and the broad EZ aggregate. It might suggest downside risk to the current consensus estimate for 0% y/y EZ inflation as consensus estimates were submitted before the earliest indicators started to become available. Ditto for the current consensus call for 0.3% y/y German CPI that would still be the weakest reading since Nov 2009. – The ECB is signaling increasing concern about risks to price stability as evidenced in recent comments by its Chief Economist Peter Praet who remarked that EZ inflation could track below 0% for an ‘extended period.' Thus, we're inching closer to sovereign bond buying with the next three meetings scheduled for Jan 22nd, Mar 18th, and Apr 29th.
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