Quotes from Societe Generale Cross Asset Research:
-Eurozone HICP inflation is set to remain negative in the coming months (probably -0.8% yoy in February). A key question is how much the fall in the euro exchange rate could lift inflation and inflation expectations in the medium term.
-Our view is that the impact of the weaker euro should not be overestimated. Since the spring of 2014, Brent oil prices have fallen by40% to about $60/b while the EUR/USD exchange rate has dropped 18% to 1.13.
-Looking ahead, we expect the euro to edge slightly lower while Brent prices should pickup slowly towards $65/b at year-end. As a result, we see HICP inflation picking up to 1.5% in the spring of 2016 before falling back to core inflation trends - i.e. slightly higher than 1.0% by end-2016.
