The estimates are calling for another drop in headline annual inflation in Germany for February. The reading is expected to decline to 2.6%, down from 2.9% in January. However, the monthly estimate is expected to show a 0.5% increase in price pressures.
The annual reading is to keep with the disinflation trend and bolster the ongoing narrative from the ECB. However, the core reading might still prove to be sticky closer to 3% and therein lies the challenge for the central bank. It is one thing to get prices back to where we are now, but it could be a bigger challenge to get it down from 3% back to the 2% target.
For now at least, they can use the latest developments as a stepping stone to begin rate cuts. But what happens if inflation continues to hold up in 2H 2024? Only time will tell.
Here's the agenda for today:
- 0630 GMT - North Rhine Westphalia
- 0900 GMT - Hesse
- 0900 GMT - Bavaria
- 0900 GMT - Baden Wuerttemberg
- 0900 GMT - Saxony
- 1300 GMT - Germany national preliminary figures
Do note that the releases don't exactly follow the schedule at times and may be released a little earlier or later.
