German CPI Inflation Data Met The Markets Expectations
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Summary:
- German CPY (YoY) CPI inflation data met market expectations.
- Looming european energy crisis.
- Initial market reactions.
German CPI inflation data comes in at 10%
Preliminary estimates showed that in September 2022, Germany's consumer price inflation spiked to 10 percent year-over-year, the highest level ever and significantly more than the 9.4 percent market projection. Following a worsening energy crisis in the biggest economy in Europe and ongoing supply chain disruptions, consumer prices have been rising.
The German CPI inflation data was forecasted at 10% and came in at 10%, in addition the German CPI (MoM) data also met market expectations and remained equal to the previous months at 1.9%, this indicates that the largest European economy has not worsened despite fears. With the war in the Ukraine continuing, and the sanctions placed on Russia by the European Union, it is no secret that the European economies are facing problems, driven by a looming energy crisis. With winter approaching and a shortage of gas forecasted, prices have been rising.
The European Central Bank’s (ECB) interest rate hawkish interest rate hiking cycle is showing no signs of slowing down, Inflation data from Europe's largest economy tends to be a clear indication of the performance of the rest of the European Economies.
In the wake of the previous German CPI inflation data release, separate statistics revealed that previously, consumer and business expectations for greater inflation and a worsening financial situation caused the euro zone's economic mood to decline significantly and more than anticipated.
The effect of the CPI Inflation Data on the Markets
As CPI inflation continues to rise, consumer confidence continues to fall, the actual figures set up a strong case for the European Central Bank to continue on their interest rate hiking cycle path.
The initial effect of the released data caused the EUR/USD to strengthen slightly, the EUR/GBP had the same effect, strengthening as the German Inflation rate remained high, yet stable.
Sources: investing.com, reuters.com, dailyfx.com
