Bavaria January CPI +2.5% vs +3.0% y/y prior

The latest inflation figures from German states released around the same time:

• Hesse CPI +2.5% vs +2.4% y/y prior
• Brandenburg CPI +2.3% vs +2.4% y/y prior
• Saxony CPI +2.4% vs +3.2% y/y prior
• North Rhine Westphalia CPI +2.0% vs +2.5% y/y prior
• Baden Wuerttemberg CPI +2.3% vs +2.6% y/y prior

At the balance, the readings here are much softer than anticipated and points to downside risks to the national reading later in the day. Of note, there were negative monthly readings for Bavaria (-0.3%), Saxony (-0.4%), North Rhine Westphalia (-0.1%), and Baden Wuerttemberg (-0.2%).

Taking everything into account, we could see German headline annual inflation come in at around the range of 2.1% to 2.3% later. The euro is lower on the day, down 0.2% to 1.0368 currently from around 1.0383 before this.

This article was written by Justin Low at www.forexlive.com.