While inflation is stronger in Germany than the euro-zone average, it remains depressed, also in October: prices fell 0.3%, worse than 0.1% expected, and y/y, they remained at a rise of 0.8%. The HICP number, which is the EU standard, also shows a slide of 0.3%, but year over year, it is down to 0.7%. This implies a lower EZ CPI.
EUR/USD is trading above 1.26 and it doesn’t seem to be affected by the number at the moment. Update: EUR/USD is finally reacting, sliding below 1.26.
Germany was expected to report a drop of 0.1% in prices in the preliminary read of CPI for October. Year over year, a rate of 0.9% was expected after 0.8% last month. However, some regional data from the various German states pointed out to a weaker number. This is critical for tomorrow’s euro-zone inflation number.
EUR/USD traded around 1.2585 towards the release, following a lot of news from both sides of the Atlantic. Fed Chair Janet Yellen is speaking at the same time.
Earlier, German unemployment came out better than expected with a fall of 22K. We had a beat also in the US with a strong rise in Q3 GDP at 3.5%, even though the internals were mixed.
The dollar was stronger on a hawkish Federal Reserve, especially with its upbeat assessment of the jobs market.
