In October, the German ZEW indicator showed its first decline in one year. The headline index dropped from 57.7 to 56.0, while the consensus was looking for a slight increase (to 58.8). The current situation, on the contrary, rose from -74.0 to - 72.2, the fifth consecutive improvement, but the increase was somewhat smaller than expected. After the impressive rally, the ZEW disappointed in the last two months, but we wouldn’t take it too serious and wait for the more reliable IFO and PMI’s to take a conclusion.
Other: UK inflation drops more than expected in September
In the UK, CPI inflation stayed flat on a monthly basis in September. The yearly figure dropped from 1.6% Y/Y to 1.1% Y/Y, while the consensus was looking for an outcome of 1.3% Y/Y. Looking at the details, food & non alcohol dropped by 0.9% M/M, transport by 1.5% M/M and communication by 0.3% M/M. Prices of clothing & footwear (3.6% M/M), education (1.8% M/M), and household (1.6% M/M) rose significantly. Core CPI came out in line with expectations falling from 1.8% Y/Y to 1.7% Y/Y. From next month onwards, however, base effects from crude oil are likely to see yearly inflation figure creep up again.
