During the next few hours and days, many economic figures will be released from Europe, which traders need to watch very carefully, as it is likely to have a notable impact on the Euro.
This week is the inflation week for the Euro Zone. Today, we will be watching France and Italy’s inflation figures, followed by the German inflation tomorrow and finally on Thursday, which set to be the most significant day, we will be watching the inflation figures of the Euro Zone.
Expectations
| Indicator | Forecast | Prior |
| France CPI | 0.4% | -0.2% |
| Italy CPI | 0.1% | 0.2% |
| German CPI | 0.6% | -0.6% |
| Euro Zone CPI | 1.8% | 1.8% |
| Euro Zone Core CPI | 0.9% | 0.9% |
Looking at the table above, it shows that the estimates are a little bit mixed. However, it’s mostly positive.
For the past few months, inflation has been rising gradually, but recently, the inflation data is actually overshooting, which puts more pressure on the ECB to withdraw the current stimulus packages as soon as possible.
In December, the ECB promised the market to start tapering the QE by April of this year, which means that the program will continue for few more months. Yet, this might need to change or to be adjusted by the ECB, as overshooting inflation is not desired especially with the current fragile growth rates and high unemployment rates in Europe.
In this case, we suspect that the ECB might be aggressive in its tapering, which should not be welcomed by the stock market, while the Euro might be the biggest winner of such policy.
This is only if inflation figures showed a dramatic increase on the coming weeks. Otherwise, the ECB will not be in a rush to taper faster than planned.
Today’s Figures
In France, the MoM CPI is expected to rise by the most since April of last year, Â while YoY CPI might advance to 1.7% in February, which would be the highest reading since October of 2012.
