Free Trial

State Level Details Suggest Stable Y/Y Inflation Across Services

GERMAN DATA

Looking at individual drivers of German February CPI inflation based on the state-level data already published, we note the following observations in addition to our headline/core forecast already released. A reminder that we estimate national CPI (non-HICP print) at +0.5% m/m and +2.6% y/y and core CPI at +0.6-0.7% M/M and +3.5% Y/Y - which would appear to be stronger than expectations coming into the day:

  • On an annual basis, services CPI appears to be sticky, again tracking in the mid-3% range (vs 3.4% in December) for the six states that reported services inflation in the flash release (around 50% of the national CPI basket).
  • Looking at the individual subcategories, all of healthcare, transport, communication, recreation and culture, education, and restaurants and hotels printed largely in line with or higher than January's figures on a Y/Y basis.
  • Goods inflation (incl. energy) appears to have decelerated further on an annual basis, to around 1.8% Y/Y (based on 67% of the national CPI basket) from 2.3% in December, seemingly driven by strong disinflation in the food and non-alcoholic beverages category.
  • Sequentially, the state data looks a little more mixed: M/M upside vs January came from clothing and recreation and culture, with education and restaurants/hotels pulling back.
  • However, as a reminder, these are not seasonally adjusted figures - our initial estimates suggest a robust print for core on a M/M SA basis (was 0.4% M/M in Jan - with services strong vs typical months, but slowing from January's 0.5% SA print). We will get more detail after the national print at 1300GMT, with the Bundesbank's usual SA M/M calculation to follow later in the day.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.