THE TAKEAWAY: German inflation cools slightly -> Growth remains primary concern -> Low volatility in Euro as market awaits ECB decision
Data released today showed German December inflation remaining consistent with economists’ predictions at 0.7% on the month. The yearly figure was 2.1%. When calculated using an EU harmonized method, monthly and yearly CPI dropped from expectations by 0.1%.
Inflation in Germany remains higher than in some other EU countries like France, but lower than the UK which has been engaged in quantitative easing measures. Growth remains the primary concern in the region – Germany, for example, has recently begun to struggle with weakened demand from economies on the European periphery, developments which have decreased export opportunities for the cornerstone German manufacturing sector.
The market remained quiet in early European trade today as investors awaited the Bank of England and European Central Bank benchmark rate event risks. The ECB last month lowered in rate by 0.25% to 1.00% in a bid to stimulate growth.
