Germany: Headline inflation prints 1.3% yoy in May - ING

Carsten Brzeski, chief economist at ING, notes that the German headline inflation came in at 1.3% year-on-year in May, from 2.1% in April, and the lowest level since April last year.

Key Quotes

“The national inflation measure dropped to 1.4% YoY, from 2.0% in April.”

“The main inflation drivers were lower food prices, continued price drops in communication and services and lower prices for leisure and package holidays. The latter shows once again the ever-returning impact of the Easter Bunny on German headline inflation, an up and down hopping which this year distorts inflation for three months. As expenditures for leisure and packaged holidays are also included in core inflation measures, available regional core inflation proxies point to a significant drop in core inflation. This is true not only in Germany (probably from 2% YoY to around 1.5% YoY), but also in the entire Eurozone.”

“Leaving the Easter Bunny fluctuation aside, today’s inflation data show that core inflation in the Eurozone is still moving sideways and actually has been doing so since 2015.”

“All of this means that the ECB will stick to its current easing bias. Clearly, low inflation also gives rise to discussion on whether the definition of price stability is still up-to-date and whether unconventional measures are still needed in a low inflation situation without deflationary risks. However, in the current set-up and at least until the change of guard in November, the ECB will do whatever it takes to bring (medium-term) inflation back to target. As a consequence, even though it’s not our base case, additional easing measures over the summer should not be ruled out.”


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD moving one step closer to 1.1000

The shared currency remains under pressure amid dismal local data and persistent demand for the greenback in a risk-averse environment. EUR/USD trading near a daily low of 1.1009.


GBP/USD trims early gains, trades in the red

The GBP/USD pair has retreated from its daily high of 1.3105 and now trades marginally lower daily basis near 1.3050, amid dollar’s strength, looming BOE and Brexit.


Crypto market: FOMO mode on, the late-comer's doubt

The crypto market opens the trading week by taking advantage of the momentum of the movement that started early Sunday morning. As if it were an established rhythm, this week it is time to go up after going down the previous one, and up again the previous one.

Read more

WTI: Bears going to town with the coronavirus, fresh lows of $52.18 printed

Oil priced are under pressure, extending a drop from just below the $66 handle at the start of his year to fresh lows at $52.18.

Oil News

USD/JPY: Bears lead on the run to safety

Coronavirus getting stronger, infections to continue to rise. Risk-off Monday, an empty macroeconomic calendar exacerbates sentiment trading. USD/JPY to accelerate its decline on a break below 108.65, a critical Fibonacci support level.