EURO: German CPI Inflation Drops to Expected 2.2% in March
The German CPI data for the March Month came at 2.2% lower than 2.5% in February month.EURUSD moved lower after the data printed. Now Market is waiting for Euro zone CPI, ECB have more possibility of rate cuts in June month if inflation moving downtrend to reach the Goal as per ECB members expected.
EURUSD is moving in Descending channel and market has reached lower high area of the channel
Germany’s Federal Statistical Office, Destatis, released data showing that the country’s Consumer Price Index (CPI) experienced a decline in March, dropping to 2.2% on a year-over-year basis from the 2.5% recorded in February. This figure aligns with the expectations set by the market. Additionally, on a monthly basis, the CPI saw a 0.4% increase, mirroring the growth observed in February.
Meanwhile, the Harmonized Index of Consumer Prices (HICP), which serves as the European Central Bank’s (ECB) preferred measure of inflation, indicated a 0.6% rise on a monthly basis and a 2.3% increase on a yearly basis in March.
EURO: German state-level inflation rates decline, hinting at national decrease
The German CPI data for the March Month came at 2.2% lower than 2.5% in February month. EURUSD moved lower after the data printed. Now Market is waiting for Euro zone CPI, ECB have more possibility of rate cuts in June month if inflation moving downtrend to reach the Goal as per ECB members expected.
EURUSD is moving in Descending channel and market has rebounded from the lower low area of the channel
Preliminary data revealed that inflation decreased in six economically significant German states in March, suggesting a continued downward trend in national inflation. Market analysts are eagerly awaiting the national inflation figures, which Germany will release ahead of the euro zone inflation data on Wednesday.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, commented, “The combined message from the data in Germany, France, Italy, and Spain is that the eurozone headline harmonized inflation will undershoot the consensus this week significantly.”
In North Rhine-Westphalia, Germany’s most populous state, the inflation rate dropped to 2.3% in March from 2.6% in February. Similarly, Bavaria saw a decline in the inflation rate from 2.6% to 2.3%, while Brandenburg experienced a decrease from 3.5% to 2.8%. Saxony’s inflation rate fell from 3.0% to 2.5%, Baden-Wuerttemberg’s from 2.7% to 2.3%, and Hesse’s from 2.1% to 1.6%.
According to economists surveyed by Reuters, Germany’s harmonized inflation is forecasted to be at 2.4% in March, down from 2.7% in February. The Ifo Institute reported that German companies’ price expectations fell in March to their lowest level in three years, with inflation expected to dip below the European Central Bank’s target in the coming months.
European Central Bank (ECB) President Christine Lagarde stated in March that the eurozone’s inflation rate was expected to continue declining, while economic growth would likely pick up during the year.
Franziska Palmas, senior Europe economist at Capital Economics, noted, “The fall in CPI inflation in the major German states in March all but confirms that both German and eurozone harmonized inflation will come in lower than expected in March.”
Eurozone inflation is anticipated to remain at 2.6% in March, unchanged from the previous month, according to a Reuters poll of economists. With a growing number of ECB policymakers favoring rate cuts, the June meeting is shaping up as the most likely time for action, although a meeting is also scheduled for this month. Palmas suggested that while a lower-than-expected eurozone inflation print would please ECB policymakers, they are likely to wait until June before considering rate cuts.
EURO: German state inflation decline signals national downturn
The German CPI data for the March Month came at 2.2% lower than 2.5% in February month.EURUSD moved lower after the data printed. Now Market is waiting for Euro zone CPI, ECB have more possibility of rate cuts in June month if inflation moving downtrend to reach the Goal as per ECB members expected.
EURJPY is moving in Ascending channel and market has reached higher low area of the channel
In March, preliminary data revealed that inflation decreased in six economically significant German states, hinting at a continued downturn in national inflation.
Economists are closely monitoring the national inflation data, particularly as Germany releases its figures a day ahead of the euro zone inflation data on Wednesday. According to Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, data from Germany, France, Italy, and Spain suggests that the eurozone’s headline harmonized inflation will significantly undershoot consensus expectations this week.
In North Rhine-Westphalia, Germany’s most populous state, the inflation rate dropped from 2.6% in February to 2.3% in March. Similarly, Bavaria saw a decline in inflation from 2.6% to 2.3%, while Brandenburg’s inflation decreased from 3.5% to 2.8%. In Saxony, the inflation rate fell from 3.0% to 2.5%, in Baden-Wuerttemberg from 2.7% to 2.3%, and in Hesse from 2.1% to 1.6%.
Reuters’ economists forecast Germany’s harmonized inflation at 2.4% in March, down from 2.7% in February. The Ifo Institute reported that German companies’ price expectations hit a three-year low in March, with inflation expected to dip below the European Central Bank’s target in the coming months.
The ECB has implemented substantial interest rate hikes to combat double-digit inflation in the eurozone’s history. ECB President Christine Lagarde stated in March that the eurozone’s inflation rate is expected to continue declining, while economic growth will gradually improve throughout the year.
Franziska Palmas, senior Europe economist at Capital Economics, noted that the decline in CPI inflation in major German states in March suggests that both German and eurozone harmonized inflation will be lower than expected. According to a Reuters poll of economists, eurozone inflation is anticipated to remain unchanged at 2.6% in March.
An increasing number of ECB policymakers are advocating for rate cuts, with the June meeting emerging as the most likely time for action, although a meeting is also scheduled for this month. Palmas suggested that while a lower-than-expected eurozone inflation print would please ECB policymakers, they are likely to wait until June before cutting rates.
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