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Regional Prints Imply Broad Based Disinflation


Digging into the details of the regional flash inflation prints, October's disinflation seems to be broad based across energy, goods and services.

  • The annual headline figure has been dragged down as expected on the back of energy-price base effects, though monthly prints for household energy and fuels have also generally shown deflation.
  • As noted in our inflation preview, goods disinflation still seems to have room to run in Germany owing to declining PPI prints and weak manufacturing PMIs. Most regional monthly prints for goods appear either flat or negative on the month, helped by lower monthly clothing and footwear prices (September readings were pushed up by the ending of summer sales). NRW clothing and footwear was +0.7% M/M vs +3.8% prior, while Bavaria showed +1.3% M/M vs +4.6% prior.
  • Services prices were pulled down in September by transport ticket-related base effects, but both the annual and monthly prints in October seem to show continued progress with several states recording flat or negative monthly services rates. Package holidays in NRW and Bavaria once again were lower on the month (-3.1% M/M vs -6.5% in September).

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