Germany July preliminary CPI -0.1% vs +0.1% y/y expected

Latest data released by Destatis - 30 July 2020

• Prior +0.9%
• CPI 0.0% vs -0.3% m/m expected
• Prior +0.6%

• HICP -0.5% vs +0.3% y/y expected
• Prior +0.8%
• HICP -0.5% vs -0.2% y/y expected
• Prior +0.7%

Headline German inflation falls into deflation territory for the first time since April 2016, as price pressures declined sharply in the month of July. This was already preempted by the state readings earlier in the day but it still doesn't make for a pretty sight.

That said, just take note that from the Saxony report, there was a heavy skew in terms of a drop in food prices that is causing a drag on inflation this month. That may have been a factor but regardless, the trend in general will keep ECB stimulus flowing.