State readings show that inflation has softened from November

And the same sentiment is likely to be reflected when the national reading comes about in just over two hours from now. Last month, the annual headline CPI estimate was +2.3% y/y:

That is expected to moderate to +1.9% y/y this month. It's very much a given that we'll see some slightly disappointing figures later relative to November. So, market expectations are definitely low going into the print release.

But what does this mean for the bigger picture?

While much of the ECB has been heavily focusing on economic growth and potential worries of a further slowdown next year, this is also something that they can't afford to let slip.

The central bank has been touting its steady inflation outlook that will move towards its goal of being close to but under the 2% target. We already saw the same kind of waning inflationary pressures in Spain and Germany today. Should this be more than a mere blip but a return towards a downtrend then the ECB will have one more added headache to deal with.

And if sluggish/flagging economic growth was a reason for them to consider pushing back the forward guidance, waning inflationary pressures will surely be the one to push them over the edge in doing so next year.