The Second Round of Inflation Reports – EU Inflation
Skerdian Meta•Friday, October 28, 2016•2 min read
A while ago, we posted the inflation numbers from Japan. I expected to see some sort of pick up this time because the global economy has improved recently and the prices have increased as well, particularly with regard to oil prices. This has helped inflation all over the world, but not in Japan. Perhaps those guys don´t belong to this world.
Anyway, after the disappointing inflation report from Japan, we will get to the second chapter today: the inflation in Europe.
If you have followed the Eurozone inflation data in the last few months, you could not have missed the positive trend. Inflation is not exactly shooting to the sky, which we don´t want either. However, moving away from the 0% base line and creating a positive trend is respectable enough. At least deflation is not a threat anymore.
So, what have the numbers been so far today?
The French monthly CPI (consumer price index) missed the expectations, but it jumped 2 points from the previous month. Still, the guys at the ECB (European Central Bank) won´t be satisfied with inflation at 0%. Consumer spending declined by 2 points, so Draghi must be beating himself up for not being able to help the country, which has been the strongest supporter in his expansionary monetary policy.
The Spanish number, on the other hand, was impressive. It beat the expectations by 4 points, jumping from 0.2%, previously, to 0.7%. That said, this is the year/year number, which isn't that extraordinary.
The German inflation report is coming up together now as well, as all the regions publish the inflation in their area. Inflation in North Rine, Westphalia jumped to 0.3% this month from 0.1% previously, and the yearly number crept higher to 0.9% from 0.7%. All the other German regions (Bavaria, Saxony, Hesse, Brandenburg, Baden Wuerttenberg, Austria, Czechoslovakia, Poland… Oops force of habit, too much history) beat the consensus by an average of 0.2%.
Great, isn't it? The trend is positive and the main German inflation report is expected to be above consensus, too. At least with these numbers, Draghi can look serious if he aims at 2% in a mid-term period, unlike his Japanese colleague who sounds bonkers when he even mentions a 2% inflation.