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Hardly any surprises with German inflation: almost all figures meet expectations. The European Standard HICP dropped 0.8% m/m and rose 0.4% y/y. The rise from 0.2% to 0.4% year is mostly due to the partial  removal of the base effect: the big fall in oil prices seen early last year. The national figures showed a m/m drop of 0.9%, slightly above -1% expected but y/y, we have 0.5% as predicted.

EUR/USD is marginally lower on the publication.

Germany was expected to report a drop of 0.8% in the national CPI for January m/m, and a rise of 0.4% y/y. In the European Standard HICP, a  drop of 0.5% was expected m/m and a rise of 0.5% y/y, better than 0.3% in December. Early publications from the various German states implied even higher outcomes.

EUR/USD traded on relatively higher ground, just above 1.09 before the publication.

The  expectations for higher headline inflation  originate from the removal of the base effects: the biggest fall in oil prices was seen early in 2015. And while oil prices  have experienced another fall in recent months, it isn’t in the same magnitude as the original fall.

The German numbers feed into the all-European publication due tomorrow. In addition to the headline figure,  that is expected to rise, we will also learn if core inflation has begun rising. It was stuck at 0.9% in recent months.