- German inflation misses forecasts in March but rebounds from its February low
- ECB members call for policy normalization
- EURUSD hovers under its short-term resistance
German price growth accelerated in March underpinning the European Central Bank’s stance to begin policy normalization relatively soon. However, inflation missed the median estimate while a base effect stopped undermining annual price growth.
The annual rate of inflation increased to 1.5% from 1.2% (HICP) falling short of expectations suggesting a bounce to 1.6%. In monthly terms the HICP measure dipped from 0.5% to 0.4% though reflecting that momentum has yet to accelerate. The data suits the latest ECB projections seeing inflation hovering around 1.5% for the rest of the year. It’s worth mentioning that the latest comments from ECB members suggest that a majority of them agree to begin a policy normalisation process before long. For one, ECB Knot said earlier today that he sees greater risks of them acting too slow rather than too quick. In a separate report we knew that Spanish price pressure also built albeit less than anticipated. In turn reports from France and Italy will be released tomorrow.
Despite a miss in German inflation the shared currency remained unimpressed. Technically the pair is moving in the vicinity of an upper limit of a lately broken channel. Until the price stays below this level a pullback toward 1.22 or even below seems to be on the cards. Source: xStation5
This article is provided for general information purposes only. Any opinions, analyses, prices or other content is provided for educational purposes and does not constitute investment advice or a recommendation. Any research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Any information provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.
Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk, we do not accept liability for any loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.