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Core CPI Remains Sticky In February

GERMAN DATA
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German national flash February core CPI inflation was 3.4% Y/Y, steady versus January's print and a touch below MNI's tracking of 3.5% following the state-level data earlier this morning.

  • Services printed at 3.4% Y/Y (unchanged vs the January print). A possible reason for the stalling in services inflation, per Goldman Sachs ahead of the release, are that effects from Germany's restaurant VAT rise are still being fed-through to end prices with a delay. While we'll have to wait for the final report for a breakdown, MNI's estimate for "Restaurants and hotels" inflation suggested no change from the 6.3% Y/Y run rate in January.
  • Core goods disinflated to 1.8% Y/Y (vs 2.3% prior), as widely expected.
  • Headline CPI was 2.5% Y/Y, below the 2.6% we had tracked from the state-level data this morning and what consensus was expecting coming into the release.
  • Food CPI decelerated markedly to 0.9% Y/Y (vs 3.8% prior) while energy still had a dragging effect at -2.4% Y/Y (vs -2.8% prior).
  • Headline HICP was in line with consensus at 2.7% Y/Y and 0.6% M/M (vs 3.1% Y/Y and -0.2% M/M prior).
  • Taken alongside the French and Spanish prints this morning, the overall Eurozone HICP figure appears to be tracking in line/a touch firmer than the 2.5% Y/Y consensus, with the core HICP expectation of 2.9% Y/Y potentially subject to upside risks (though it's not a straightforward translation from CPI to HICP).


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German national flash February core CPI inflation was 3.4% Y/Y, steady versus January's print and a touch below MNI's tracking of 3.5% following the state-level data earlier this morning.

  • Services printed at 3.4% Y/Y (unchanged vs the January print). A possible reason for the stalling in services inflation, per Goldman Sachs ahead of the release, are that effects from Germany's restaurant VAT rise are still being fed-through to end prices with a delay. While we'll have to wait for the final report for a breakdown, MNI's estimate for "Restaurants and hotels" inflation suggested no change from the 6.3% Y/Y run rate in January.
  • Core goods disinflated to 1.8% Y/Y (vs 2.3% prior), as widely expected.
  • Headline CPI was 2.5% Y/Y, below the 2.6% we had tracked from the state-level data this morning and what consensus was expecting coming into the release.
  • Food CPI decelerated markedly to 0.9% Y/Y (vs 3.8% prior) while energy still had a dragging effect at -2.4% Y/Y (vs -2.8% prior).
  • Headline HICP was in line with consensus at 2.7% Y/Y and 0.6% M/M (vs 3.1% Y/Y and -0.2% M/M prior).
  • Taken alongside the French and Spanish prints this morning, the overall Eurozone HICP figure appears to be tracking in line/a touch firmer than the 2.5% Y/Y consensus, with the core HICP expectation of 2.9% Y/Y potentially subject to upside risks (though it's not a straightforward translation from CPI to HICP).