- Prior +1.8%
- HICP +2.1% vs +2.0% y/y expected
- Prior +2.0%
- Core CPI Y/Y +2.5% vs +2.4% prior
- Full report here
Germany inflation
Slightly higher than expected figures but won’t change anything for the ECB. Policymakers have repeatedly said that they won’t respond to small or short-term deviations from the 2% inflation target.
The euro’s strength recently has caught the ECB’s attention as it crossed the 1.20 level against the dollar. Policymakers have mentioned that in case euro’s appreciation starts to negatively affect inflation, it will have consequences for monetary policy, suggesting a potential rate cut.
Traders will keep a close eye on the euro, on Eurozone inflation and policymakers’ signals in the next months.
EURUSD – 1 minute chart
There’s been minimal market reaction to the data as it doesn’t change anything for the future interest rates outlook. The focus will now turn to the US Dollar as we get many top tier economic reports next week that will culminate with the US NFP on Friday. Strong data is likely to trigger a relief rally in the greenback, while soft figures could keep on weighing on it.
