La BCE va réduire les taux en octobre

Hugo Le Damany et François Cabau, économiste et senior économiste de la zone euro chez AXA Investment Managers

L'inflation globale de la zone euro a diminué de 0,4 point de pourcentage pour atteindre 1,8% en glissement annuel en septembre, en dessous de l'objectif de 2% pour la première fois depuis juin 2021.
Hors les effets de base importants liés à l'énergie, l'inflation sous-jacente a baissé de 0,1 point de pourcentage pour atteindre 2,7% en glissement annuel.
Ce décalage est important pour la BCE, qui dans ses dernières prévisions avait prévu une inflation sous-jacente d'environ 2,9% en septembre. La mesure corrigée des variations saisonnières montre un affaiblissement supplémentaire de la dynamique de l'inflation sous-jacente.
Nous révisons notre prévision et pensons désormais que la BCE procédera à une nouvelle baisse de taux de 25 points de base lors de sa réunion d'octobre.

Euro area headline inflation dropped to 1.8% yoy in September (-0.4pt), slightly above our forecast but below consensus (2%). Energy deflation accounts for most of the deceleration (-6% yoy) but core inflation decelerated to 2.7% yoy (-0.1pt). It is in line with our forecast and below consensus (2.8%). But most importantly it is a large miss versus ECB September macroeconomic projections. The ECB had a core inflation averaging 2.9% in Q3, which implied a figure around 2.9% for September.

ECB to cut rates at its October meeting. Considering the persistent nature of today's inflation downside surprise on ECB's forecasts, as well as the October meeting market pricing (25bps cut priced with over 90% probability), we now expect the ECB to cut rates by 25bps at its October meeting, reflecting their data-dependence and meeting-by-meeting approach. We will review our rate expectations beyond October and publish a revised path by the end of this week.

Faster core disinflation

EMU services inflation decelerated to 4.0% from 4.1% in August but the decline is less important than initially thought. We suspect French large decline in CPI services inflation (from 3% to 2.5%) has been less important through harmonised measure, while services inflation continue to remain elevated in several countries. It can be Germany that may have stronger services inflation through harmonized measure (CPI services inflation came at 3.8% ,from 3.9%), but we suspect some stickiness in the Netherlands and Belgium. In Italy, HICP services inflation declined by 0.3pt to 3.1% yoy.

Consequently, the picture is a bit blurred. Services inflation stays elevated but disinflationary trend well entrenched. Monthly pace in September came at -1% (non-seasonally adjusted), much closer to last decade average but most importantly the ECB seasonally adjusted measure shows faltering momentum (Exhibit 2).

All the more so as non-energy industrial goods (NEIG) inflation stayed muted at +0.4% yoy (flat from August). In several countries such as Italy and Spain, September is usually the month with some goods being repriced after the summer sales, but it seems weak demand weigh on the normalisation of prices (i.e Italian NEIG rose by 5.3% mom, a much lower level than the average in last decade that is closer to +8.5% excluding COVID period).