German consumer prices rise 0.1% y/y, contrary to a fall of 0.2% in the predicted in the national numbers. Month over month, prices rise 0.9%. The EU standard figures still show a drop of 0.1% but m/m rise of 1%. All numbers beat predictions.
EUR/USD is ticking up to 1.1240. This positive surprise was not entirely unexpected after the state data.
Germany was expected to report a gain of 0.7% in prices m/m in both the national and the EU standard HICP number. Prices dropped by 1.1% and 1.3% respectively last month. Year over, the euro-zone’s largest nation was still expected stay in deflation territory, with a drop of 0.2% in the national number and 0.4% in HICP.
EUR/USD traded around 1.1222, attempting a recovery that looked more a dead cat bounce.
Yesterday, the US dollar surged on a combination of solid US inflation data with bullish comments from Bullard.
Earlier,. the various German states reported their numbers, and these were somewhat upbeat. The reason for a recovery now is the stabilization in oil prices, while the value of the euro remained low, pushing imported prices higher.
Spanish inflation came out better than expected with a year over year decline of 1.1%. Spain has one of the worst deflation levels but also enjoys growth.
There is another big event for EUR/USD coming up soon: the second release of US GDP.
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