Headline inflation eased to 2.4% y/y. Core inflation drops to 3.6% y/y. Also, core services price inflation is now easing, indicating that the labour market has become more balanced and that the ECB will worry less about upside risks to inflation. The positive surprise in today’s flash Euro-area inflation estimate for November is that increases in services prices have become smaller. Core services price inflation is the part of inflation that is most susceptible to labour market tightness and wage growth and thus indicate that the labour market has become more balanced and corporates’ pricing power has weakened due ... (full story)