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Eurozone annual inflation has reached 0.5% in October

Eurozone annual inflation has reached 0.5% in October, which was its highest level since June 2014, while the core inflation to 0.8% on annual basis. The measures of loose monetary policy of the European Central Bank (ECB) seems to be starting to bear fruit, and Eurozone sustainable managed to avoid inflation for several months in a row. The next meeting of the ECB Governing Council is after two days – on November 2, but on it will not be taken decisions on monetary policy.

For the markets more important is what happens on December 8, when the ECB will meet on the topic of monetary policy in Frankfurt, not missing expectations for an extension of quantitative easing or other changes in the program of the ECB towards increasing the incentives.

Although 28-month high, inflation in the Eurozone remains far from the target bet by the European monetary institution for 2%.

Besides the inflation data, the official statistics of Eurostat today unveiled more specific information about the economic development of the Eurozone. In the third quarter the European Monetary Union reported economic growth of 1.6% yoy and 0.3% qoq. Thus retaining the growth that the Eurozone economy reported in the second quarter. The data published today is preliminary, as of November 15 is expected the second reading, on which may occur some changes.

Meanwhile, the EUR is heading to its biggest monthly decline against the USD since May on speculation that the ECB will continue to loosen monetary policy, while the US Federal Reserve may raise rates by the end of the year. According to markets, the probability of this happening by the end of 2016 was 69%.

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