Germany April preliminary CPI (HICP) +2.2% vs +2.1% y/y expected

• Prior +2.3%
• HICP m/m +0.5% vs +0.4% expected
• Prior +0.4%
• Core CPI Y/Y 2.9% vs 2.6% prior

A touch above expectations but nothing that will change the ECB’s plan of cutting rates in June. The Core reading saw a notable jump though. We will see how things evolve in the next months but the trade negotiations remain the market’s focus.

On a forward looking basis, if we get a resolution on the trade war front, we could see a strong and sudden pickup in demand which would push economic activity and prices up. That’s something to watch out for as it could trigger a more hawkish repricing in interest rate expectations.

This article was written by Giuseppe Dellamotta at www.forexlive.com.