The chart above certainly looks promising but the job isn't done yet for the ECB. Core annual inflation in Germany was still seen at 3.0% in April. Although that has gradually trended lower in recent months, it is pretty much the "easy" part in getting inflation back to near 3%. The "hard" part is the final stretch is pulling prices back to the 2% mark.
And that is where we are at now.
Looking at the estimates today, headline annual inflation is estimated to tick a little higher to 2.4% in May. But look out for how the trend will shape up in the core reading for the months ahead. That will play a key role in determining the ECB's next steps after the rate cut next week.
Here's the agenda for today:
- 0800 GMT - North Rhine Westphalia
- 0800 GMT - Hesse
- 0800 GMT - Bavaria
- 0800 GMT - Baden Wuerttemberg
- 0800 GMT - Saxony
- 1200 GMT - Germany national preliminary figures
Do note that the releases don't exactly follow the schedule at times and may be released a little earlier or later.