MNI Projects National Dec CPI In Line w/ Consensus At 3.6-3.7% Y/Y

We have now received state data that equates to 86.7% weighting of the national December flash German CPI print (due at 1300 BST / 1400 CET). MNI estimates that national CPI rose by 0.0-0.1% m/m and 3.6-3.7% y/y.

• This is based on the published index values for available state data. The data implies readings broadly in line with expectations coming into the session of +3.7% Y/Y and +0.2% M/M.
• Today's state data points to core CPI (ex-energy and food) of roughly 3.5% Y/Y, vs 3.8% in November. Core CPI data is only available for 6 states accounting for 50.0% of the national index so this is a rough estimate, but the direction vs November's reading seems clearly downward.
• A key expected driver of the December uptick was a base effect in energy prices coming from subsidies at the end of last year. MNI's estimate of energy inflation is around 4.2% Y/Y (vs -4.5% prior).
• Note: these estimates are in relation to the national CPI print, not the HICP print which feeds into the Eurozone HICP print that the ECB targets. The magnitude of surprises to consensus can sometimes be different due to the different methodologies and weights used in national CPI vs HICP - but the direction of the surprise is normally the same.

  Y/Y	December (Reported)	November (Reported)	Difference
  North Rhine Westphalia	3.50	3.00	0.50
  Hesse	3.50	2.90	0.60
  Bavaria	3.40	2.80	0.60
  Brandenburg	4.50	4.10	0.40
  Baden Wuert.	3.80	3.40	0.40
  Berlin	3.90	3.40	0.50
  Bremen	N/A	1.10	N/A
  Saxony	4.30	3.90	0.40
  Rhineland-Palatinate	3.50	3.00	0.50
  Lower Saxony	3.70	3.10	0.60
  Mecklenburg Western Pomerania	N/A	3.70	N/A
  Saxony-Anhalt	N/A	3.00	N/A
  Saarland	4.10	3.70	0.40
  Thuringia	N/A	3.60	N/A
  Weighted average:	3.67%	for	86.7%

  M/M	December (Reported)	November (Reported)	Difference
  North Rhine Westphalia	-0.1	-0.3	0.2
  Hesse	0.0	-0.4	0.4
  Bavaria	0.1	-0.4	0.5
  Brandenburg	0.0	-0.3	0.3
  Baden Wuert.	0.1	-0.3	0.4
  Berlin	0.2	-0.8	1.0
  Bremen	N/A	-0.3	N/A
  Saxony	0.2	-0.3	0.5
  Rhineland-Palatinate	0.1	-0.4	0.5
  Lower Saxony	0.1	-0.4	0.5
  Mecklenburg Western Pomerania	N/A	-0.4	N/A
  Saxony-Anhalt	N/A	-0.3	N/A
  Saarland	0.1	-0.3	0.4
  Thuringia	N/A	-0.4	N/A
  Weighted average:	0.04%	for	86.7%