German CPI expected to tick higher – Danske Bank

Senior Analyst at Danske Bank Pernille Henneberg expects German inflation figures to surprise to the upside during the current month.

Key Quotes

“German HICP inflation is due to be released today and we expect it to reach 1.9% for the first time since 2013”.

“With German inflation back around the ECB’s 2% target, German scepticism about the very loose monetary policy is likely to intensify, but the latest comments from ECB President Mario Draghi clearly confirmed that the ECB will only react to higher inflation when it is seen across the euro area and there is a sustained adjustment in the inflation path”.

“Related to this, the rise in both German and euro area inflation is lifted mainly by higher energy prices whereas the underlying inflation remains low as reflected by German core inflation at only 1.1% on average in 2016. The euro area HICP inflation figure for January is due to be released tomorrow”.