JPY: Testing broader lows

• EUR Benchmark Long 15Y Fixed (Oct. 1, 2039) BTPS+13 Area
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• Benchmark Security: BTPS 3.25% 3/2038
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• Settlement: Feb. 7, 2024
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While the headline French flash inflation metrics printed below consensus on an annual and monthly basis, we note an acceleration in annual services CPI inflation to +3.2% Y/Y (vs +3.1% prior).

• A reminder that the January flash PMI signalled that wage pressures continue to drive inflationary pressures in the services sector.
• However, core inflation, which is not reported in the flash release, is likely to have continued decelerating in January, with non-energy industrial goods inflation estimated at +0.7% Y/Y (vs +1.4% prior).
• Base effects meant annual energy inflation fell to +1.8% Y/Y (vs +5.7% prior). We note that increases in the excise tax on natural gas in January will have likely pushed up the monthly NSA energy print.
• Tobacco prices rose +16.8% Y/Y, after tobacco duties were increased in January.
• Finally, both processed and unprocessed foods inflation moderated in January, with overall food CPI at +5.7% Y/Y (vs +7.2% prior).
• Rounding off this morning's data:
  • HICP: 3.4% Y/Y (vs 3.6% cons, 4.1% prior); -0.2% M/M (vs -0.1% cons, 0.1% prior).
  • CPI: 3.1% Y/Y (vs 3.3% cons, 3.7% prior); -0.2% M/M (vs 0.0% cons, 0.1% prior)