FxWirePro: Daily Commodity Tracker - 21st March, 2022 
This week’s readings from across Europe provided enough evidence to suggest that inflation is once again slowing down after a spike earlier this year.
- Readings from France showed that inflation declined to 0.9 percent, which is the weakest level in five months.
- German inflation reached a four-year high of 2.2 percent in February, however, the latest reading has shown that inflation declined to just 1.4 percent in May. The reading was weaker than the median consensus of 1.6 percent.
- Inflation in Spain has moderated to 2 percent in May from 3 percent earlier this year.
- Inflation in Italy declined from 2 percent in April to just 1.5 percent in May.
The Eurozone inflation declined from 1.9 percent in April to just 1.4 percent in May.
So, the question we are faced with is that with a slowdown in inflation, do we need to revise our short call in Bund?
While the changes in actual inflation is a very important fundamental consideration, especially for our bund, we believe that the good days for German fixed income are of the past. We don’t see the European Central Bank (ECB) adding further to its monetary policies. The recent slowdown in inflation comes along with the comments from Bundesbank Chief Jens Weidmann that inflation will continue to rise even if ECB winds up its easy monetary policy.
As of now, we remain committed to our short bund trade that was recommended last October after price declined below 162.5. Two of the targets 160 and 159.2 have been achieved and next targets are lined at 157.5, 153.6, and at 151.8. German 10-year bund is currently trading at 162.4
