Summary:
- German HICP rises to +1.8% Y/Y
- Beats forecasts (+1.7%) and prior reading (+1.5%)
- Little reaction seen in the Euro which remains flat on the day
Inflation in the Eurozone’s most influential country has risen faster than expected according to the latest data. The German HICP for November rose by 1.8% Y/Y compared to an expected 1.7% gain and a prior reading of 1.5%.
The rise will go some way to offset the earlier Spanish HICP reading which remained steady at 1.7% Y/Y with a rise to 1.9% expected. Inflation metrics across the Eurozone have pulled back this year after a strong rise seen throughout 2016.
The latest inflation data from Germany has shown a move higher but the Spanish equivalent remained flat. Source: XTB Macrobond
Given that the ECB have recently announced an extension of the Asset Purchase Programme it is unlikely there will be an alteration to monetary policy in the coming months. Inflation remains slightly below the 2% mandate that is set for the central bank but not far enough to warrant any undue concern. The latest data could be seen to support the gradual removal of further monetary stimulus from the ECB.
The market reaction to the release was fairly subdued and the Euro remains little changed on the day. The single currency hasn’t experienced a move greater than 0.5% against any of its peers so far today and is towards the middle of the range.
The EUR saw little reaction to the release and remains little changed on the day. Source: xStation