The Chicago Fed National Activity indicator fell in August to -0.9 from -0.56 in July. However, the less volatile three month moving average, the preferred measure, is still firmly upward oriented at -1.09 versus -1.61 in July. An indication below zero still means below trend growth in the economy and easing inflationary pressures.
EMU: German CPI falls more than expected
German HICP inflation fell by 0.4% M/M in September, pushing the Y/Y figure to - 0.4% Y/Y, down from -0.2% Y/Y in August. Consensus was looking for a -0.2% M/M and Y/Y. Looking to the Länder CPI reports, the decline was driven by lower food prices, slightly cheaper energy costs and steeply falling hotel and holiday package prices, a seasonal phenomenon. The report suggests that the risks are on the downside for EMU HICP, to be released tomorrow, too. Belgian and Spanish CPI reports, to be released today, should allow us to fine-tune our expectations.
