GERMAN DATA
German August PPI was a little higher than consensus at 0.2% M/M (vs 0.0% cons, 0.2% prior) and -0.8% Y/Y (vs -1.0% cons, -0.8% prior). Producer prices excluding energy, which should provide a better read-through to core goods HICP, rose 1.2% Y/Y from 0.9% in July.
- This was the fifth consecutive acceleration in annual PPI ex-energy inflation. While this may suggest a stalling in core goods HICP disinflation in the coming months, weak manufacturing sector demand may keep consumer price inflation under pressure.
- In August, core HICP inflation was 0.7% Y/Y, its lowest since April 2021.
- On a 3m/3m basis, PPI ex-energy rose 0.4%, a little below the 0.6-0.7% pace observed through April to July. All major goods-related sub-components (i.e. investment, intermediate and consumption goods) eased on a 3m/3m basis.
- Energy PPI fell further into deflationary territory in August to -4.6% Y/Y (vs -4.1% prior), but rose for the first time in 9 months on a 3m/3m basis, at 0.1% (vs -0.5% in July).
- This meant that headline PPI ticked up a tenth to 0.4% on a 3m/3m basis.
- On Monday, we receive the September flash PMIs. The manufacturing survey will provide an updated signal of goods pipeline pressures in Germany.
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