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    Germany: disinflation won’t surrender

    The panic around Greece distracted the market from interesting news this week: In June, Germany’s inflation weakened sharply in comparison with the previous month. In May, consumer price inflation was at 0.7% y/y, in June it slipped to 0.3% y/y (see the Chart). In the federal states of North Rhine-Westphalia, Brandenburg and Hesse inflation was equal to the national (0.3%), and in Bavaria and Saxony it surpassed the national index, registering 0.5% y/y. The lowest inflation rate – 0.2% y/y – demonstrated the federal state of Baden-Wurttemberg.

    germany-inflation-cpi2-7-15

    Germany’s slowdown that took place in June influenced the Euro area in general. However, at the regional level, the weakening was not so sharp – E-19 CPI decreased from 0.3% to 0.2% y/y.

    The June statistics confirmed the ECB’s statements that the victory over the weak inflation in the euro zone wouldn’t be that easy, therefore the Central Bank shouldn’t end its massive injections of liquidity (quantitative easing) until September next year. In March, when the regulator began its QE program, German CPI held at 0.3% y/y. As you can see, three months later it returned to the same level. I believe it has been an unpleasant news for Mario Draghi and his team…

     

    Dear traders, please post your comments to our forecasts and share your own opinion. Your ideas can be very helpful for the newcomers in the forex market. Thank you!

    The panic around Greece distracted the market from interesting news this week: In June, Germany’s inflation weakened sharply in comparison with the previous month. In May, consumer price inflation was at 0.7% y/y, in June it slipped to 0.3% y/y (see the Chart). In the federal states of North Rhine-Westphalia, Brandenburg and Hesse inflation was equal to the national (0.3%), and in Bavaria and Saxony it surpassed the national index, registering 0.5% y/y. The lowest inflation rate – 0.2% y/y – demonstrated the federal state of Baden-Wurttemberg.

    germany-inflation-cpi2-7-15

    Germany’s slowdown that took place in June influenced the Euro area in general. However, at the regional level, the weakening was not so sharp – E-19 CPI decreased from 0.3% to 0.2% y/y.

    The June statistics confirmed the ECB’s statements that the victory over the weak inflation in the euro zone wouldn’t be that easy, therefore the Central Bank shouldn’t end its massive injections of liquidity (quantitative easing) until September next year. In March, when the regulator began its QE program, German CPI held at 0.3% y/y. As you can see, three months later it returned to the same level. I believe it has been an unpleasant news for Mario Draghi and his team…

     

    Dear traders, please post your comments to our forecasts and share your own opinion. Your ideas can be very helpful for the newcomers in the forex market. Thank you!


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