German inflation: This seven-month low for the annual figure could suggest that inflation in the eurozone's largest economy has peaked
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German inflation for March came in at 7.4% meeting expectations. Michael Stark from Exness comments on the print.
Michael Stark (Exness): German annual non-core inflation for March was confirmed at 7.4%, the same as the preliminary figure and in line with the consensus. The monthly figure at 0.8% also matched expectations. This seven-month low for the annual figure could suggest that inflation in the eurozone's largest economy has peaked and the effect of the ECB's strong tightening is starting to become clear.However, there hasn't yet been a consistent decline in the rate of inflation in Germany. Annual inflation held at 8.7% in February and even 7.4% is nearly quadruple the ECB's usual target of 2%, so hailing the central bank's success would be premature. It seems more likely that the ECB will stay the course and that the main refinancing rate will reach around 4-4.25% in July.
It seems more likely that the ECB will stay the course and that the main refinancing rate will reach around 4-4.25% in July
Michael Stark (Exness): With the situation seemingly under control for now and the ECB gradually catching up to the Fed's funds rate, the euro might have more room to gain against other major currencies, but the technical situation for euro-yen near a possibly strong resistance might make buying that particular pair now risky. Traders are looking ahead to ZEW sentiment on Tuesday 18 April and final eurozone-wide inflation the next day for upcoming significant drivers.
