France’s inflation figures for December show no changes to earlier estimates. Headline annual inflation fell, remaining steady at 0.7% year-on-year, consistent with preliminary data. However, core annual inflation saw a slight increase to 1.1%, up from 1.0% in November.

Services inflation eased modestly to 2.1% in December, down from 2.2% the previous month. In contrast, food price inflation rose to 1.7%, up from 1.4% in November.

These readings stay comfortably below the European Central Bank’s 2% target, especially for core inflation. This suggests that, from an economic data perspective, France is currently not a major concern for ECB policymakers. Nonetheless, France’s political environment continues to pose separate risks, though these are beyond the scope of this analysis.

For forex traders, the focus remains firmly on inflation developments in Germany and Spain. Germany, in particular, presents the biggest risk, with potential stagflation concerns as the year progresses.

Original Source: Justin Low of investinglive.com