On Wednesday, France’s National Institute of Statistics and Economic Research (INSEE) released the latest data: France’s September inflation rate rose to 3.4%, significantly higher than August’s 2.6%, and above market expectations of 3.2%, reaching a more-than-two-year high. Energy prices surged 21.2% year over year, serving as the main driver. At the same time, services inflation rose to 2.2%, and food inflation also climbed to 1.5%.
The data indicate that inflation persistence is far beyond expectations, not only confined to initial energy shocks but spreading into the services and food sectors. Market optimism that the European Central Bank’s tightening cycle is nearing its end has been severely challenged, forcing policymakers to face greater pressure for further rate hikes.
The rebound in inflation has directly boosted European government bond yields, reinforcing expectations that the central bank will keep interest rates high for longer. The U.S. dollar and yields on major sovereign bonds remain at elevated levels, continuing to weigh on global liquidity; risk-off sentiment across asset classes is gradually building.
For the crypto market, this renewed reinforcement of expectations for tighter macro liquidity is not a good sign. Persistently high funding costs are likely to suppress incremental liquidity flowing into risk assets such as $BTC . In the near term, the market may face valuation adjustments and ongoing downside pressure alongside continued volatility.
#Inflation #ECB #MacroEconomy
The data indicate that inflation persistence is far beyond expectations, not only confined to initial energy shocks but spreading into the services and food sectors. Market optimism that the European Central Bank’s tightening cycle is nearing its end has been severely challenged, forcing policymakers to face greater pressure for further rate hikes.
The rebound in inflation has directly boosted European government bond yields, reinforcing expectations that the central bank will keep interest rates high for longer. The U.S. dollar and yields on major sovereign bonds remain at elevated levels, continuing to weigh on global liquidity; risk-off sentiment across asset classes is gradually building.
For the crypto market, this renewed reinforcement of expectations for tighter macro liquidity is not a good sign. Persistently high funding costs are likely to suppress incremental liquidity flowing into risk assets such as $BTC . In the near term, the market may face valuation adjustments and ongoing downside pressure alongside continued volatility.
#Inflation #ECB #MacroEconomy