Good morning all and a very happy new year to those just joining back from the break. Only 352 days until Christmas
We have Germany releasing their December inflation data today and as usual the states have been pumping out their numbers.
- Saxony unchanged 1.4% y/y. 0.4% vs 0.3% prior m/m
- Brandenburg unch 1.3% y/y. 0.4% vs 0.2% priro m/m
- Hesse 1.2% vs 1.1% prior y/y. 04% vs 0.2% prior m/m
- North Rhine 1.8% vs 1.6% prior y/y. 0.5% vs 0.3% prior m/m
So an uptick in inflation in all monthly numbers and two states report higher yearly inflation. No deflation worries in Germany just yet then.
The full German release is at 13.00 GMT and while the German CPI figures are expected to show inflation rising to 1.4% from 1.3% y/y the EU harmonised number (HICP) is expected to fall to 1.4% from 1.6% y/y but with the monthly number up to 0.7% from 0.2%.
If a euro zone country is going to show inflationary pressure it’s going to be Germany. If it carries on up while the rest stay low then the Germans are going to be getting all hot under the collar.
Here’s what happened the last time inflation numbers released looked like becoming a problem.
Then in 2011, surprisingly, the ECB decided to raise rates
