National CPI is flat m/m and rose 0.3% y/y. HICP is flat m/m and up 0.2%. All the numbers are 0.1% better than expected, but not surprising given the early state releases.
The reaction on EUR/USD is relatively muted at 1.0940.
German CPI national inflation was expected to drop 0.1% m/m and rise 0.2% y/y. European standard HICP inflation carried expectations for -0.1% m/m and +0.1% y/y. However, the early releases from various German states generally beat expectations, so the “whisper numbers” may have been higher.
EUR/USD traded around 1.0940 before the release, slightly lower after the OK US GDP release which showed a rise of 1.5% annualized.
Fear of a deflationary spiral was among the reasons behind the ECB’s thick hint about more easing in December.
Draghi opened the door to extending and expanding QE as well as cutting the negative deposit rate. He also expressed worries about emerging markets and the exchange rate and that the fall in energy prices will not be that transitory.
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