Spain, the euro-zone’s fourth largest economy, reported a year over year drop of 0.5% in prices, the worst since 2009. The previous read was a drop of 0.4%. This implies a weaker euro-zone CPI tomorrow. See how to trade the euro-zone CPI with EUR/USD. The event could be critical for the ECB decision.
EUR/USD seems unmoved by the figure, and is holding on to gains just above 1.32.
When looking back at recent history, we see Spanish inflation floating around 0% since September 2013. It used to be higher beforehand, but this was a result of a heavy hike in VAT that came into effect back in September 2012, making the following year’s numbers skewed to the upside.
On a positive note, Spain confirmed the GDP growth for Q2, which was quite strong and way ahead of the trend: +0.6% quarter on quarter and 1.2% year over year.
Germany contracted in Q2 and France remained unchanged. The all-euro-zone figure remained unchanged.
The focus now shifts to German CPI numbers which are gradually released by the various German states.
