Breaking news! Inflation in Germany is a surprise.. This is what awaits other European countries! By FXMAG UK

FXMAG UK – Germany’s flash CPI reading for March came in at 7.4% y/y. The decline in inflation in our western neighbors is not as dynamic as in distant Spain.

• Preliminary CPI for Germany March 2023: 7.4% YoY. Consensus assume 7.3% yoy.
• HICP comes in at 7.8% yoy. Forecasts had been for a decline to 7.5% yoy from 9.3% yoy in February.
• On a monthly basis, the index rose by 0.8%, after 0.8% in February, and the forecast was 0.7%.

Germany consumer inflation initially rose to 7.4% yoy 0.8% m/m in March 2023. Forecasts assumed 7.3% yoy 0.7% m/m.

HICP was 7.8% year over year. Forecasts had been for a decline to 7.5% yoy from 9.3% yoy in February. On a monthly basis, it came in at 1.1% against expectations of 0.8% and 1% in February.

Today’s post is a good introductory read for the Eurozone, which is due out tomorrow. Germany has the highest weight (27.7%) among all eurozone members in the monetary union’s HICP index.

last minute | German inflation data higher than expected: 7.4% https://t.co/4uj2oyOtwu#inflacion #datos #ipc #inflacioneuropa #alemania #europa #economia #economiaeuropa #inflacioneuropa #macroeconomia #datosmacro #noticiasinesstañol #com / W8drXXa077

– Business TV (@negocios_tv) March 30, 2023

The result of the German index is mainly due to energy and food price components. Economists expected the underlying effect to be stronger.

Analysts: Weak inflation pressures to raise interest rates in the eurozone Daniel Kosteki, an analyst at CMC Markets, commented on the inflation situation in Germany. “7.4% in March is the lowest value since April 2022. The reading is slightly above expectations. According to Destatis, food prices in March 2023 continued to show an above-average increase (+22.3%) compared to the same month last year on the one hand. Others, the rise in energy prices visibly slowed down (+3.5%) after the rebound in energy prices in March 2022, when Russia attacked Ukraine (February 2023: +19.1% vs. February 2022) the index’s level rise since March 2022. The third relief package funds from The federal government, which is reflected in the consumer price index, in development “- explained Kosteki.

The Euro is getting stronger today against the US Dollar by 0.45% “There are still interest rate hikes at stake, which European Central Bank representatives tend to lean towards in their latest statements. Inflation in Germany is visible, but its pace is slower than expected, which could put pressure around Further interest rate increases in the eurozone, ”- Kosteki believes.

Strong inflation in Spain, but superficial. It should be noted that the very optimistic data on inflation in Spain was released this morning. Experts expected price growth to slow to 3.8% annually, and the CPI reading rose to 3.3%.

And although this is only preliminary data, it shows a very positive trend. What’s more, a month ago the CPI in Spain was 6%, still a value we can only dream of for at least a few quarters in Poland. So Spain, quite unexpectedly, became the leader in the race to contain inflation. It is 0.1% ahead of Liechtenstein and Switzerland, says Maciej Przegorzewski, chief currency strategist at Currency One.

However, it is worth noting that core inflation — that is, the indicator that excludes unprocessed food, energy and fuels — fell by a hair’s worth to 7.5% in March from 7.6% the previous month. This indicates that inflation continues after all.

Tomorrow we will get snapshot CPI readings for France, Italy and the entire Eurozone.