The preliminary Eurozone CPI measure for December will be released today. After yesterday’s stronger-than-expected German CPI print for the same month at 2.6% y/y, there are expectations that the Eurozone print could follow suit. Following a brief dip below the ECB’s 2.0% target in September, Eurozone inflation has stayed moderately above this target, but growth concerns have been fuelling expectations of accelerated rate cuts. The December CPI estimate is forecast to rise to 2.4% y/y from 2.2% y/y in November, driven by fuel price base effects. Meanwhile core inflation is expected to hold at 2.7% y/y and services inflation at 3.9% y/y, both above the ECB’s comfort zone. Despite this, disinflation remains the dominant trend, with 100bp worth of rate cuts projected for 2025. Inflation risks are skewed to the downside, supported by easing wage growth and stabilising profit margins. Headline inflation is expected to drop below 2.0% by mid-2025, with core inflation edging lower in early 2025. Weak growth and moderating cost pressures should see the ECB cut rates through March, then move to quarterly reductions.