Heads up: Germany states’ CPI readings due later today

Germany remains a real buzzkill for the ECB at the moment. Europe’s largest economy is putting a real drag on the growth outlook and on the inflation front, price pressures are also looking fairly sticky. And that should once again be the case this month as well.

In terms of headline annual inflation, it did dip below the 2% mark in recent months but is estimated to climb back up to 2.3% in November. That’s not the whole story though.

Core annual inflation actually climbed last month to 2.9%, up from 2.7% in September. And that’s the real issue if it continues to stick that way in the months ahead as well.

For now though, the comfort is that other economies are at least seeing slower price pressures. And the fact that there is a stronger focus towards the economic slowdown in Europe, rather than inflation for the time being.

But at some point if this persists long enough, stagflation fears will start to creep in. And that won’t bode well for Germany, especially with its manufacturing sector already in a recession for the past year.

Here’s the agenda for today:

• 0900 GMT – North Rhine Westphalia
• 0900 GMT – Hesse
• 0900 GMT – Bavaria
• 0900 GMT – Baden Wuerttemberg
• 0900 GMT – Saxony
• 1300 GMT – Germany national preliminary figures

Do note that the releases don’t exactly follow the schedule at times and may be released a little earlier or later.

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