Bid On NRW CPI

Schatz & Bund futures turn bid and look through Monday’s session highs on the back of the North Rhine-Westphalia CPI readings for August, which printed at +8.1% Y/Y & +0.3% M/M, vs. last month’s +7.8% and +1.1%, respectively.

• It looks like the softening in the M/M reading has supported the German FI futures complex, with the BBG consensus looking for +0.4% M/M & +7.8% Y/Y when the national CPI data hits later today.
• A quick reminder that the North Rhine Westphalia region has a 21.7% weighting in the national CPI print.
• The NRW regional stats office noted that “in a monthly comparison, food was the main price driver (+2.0 %). Among other things, they were cheaper Potatoes (−8.2 %), but also fuels (−5.7 %; including petrol −6.9 %).”
• “Compared to the same month last year (August 2021), the prices for household energy rose (+53.2 %; including: heating oil including levy +86.9 %) and for various foods such as quark (+57.8 %), cucumbers (+ 48.8 %), butter (+43.6 %) and pasta (+42.0 %).”
• “Price declines, especially in (partially) administered prices, had a dampening effect on overall inflation compared to the same month last year (August 2021). For example, the prices for so-called combined passenger transport fell by 68.4 % (9-euro ticket) and for inpatient (−9.1 %) and outpatient care (−7.9 %) for those with statutory health insurance (care reform).”
• The well-documented 9-euro ticket is keeping Y/Y inflation at subdued levels (at least for now as the scheme expires at the end of this month), but that wouldn’t have impacted the M/M reading.