February flash German HICP inflation likely to print at -0.6% yoy: Societe Generale

Quotes from Societe Generale Cross Asset Research:

-The January German HICP reading showed inflation turning negative for the first time since October 2009. The bulk of the deceleration reflected the ongoing fall in oil prices as the energy component fell from -6.6% yoy to -9.0% yoy (cutting 26bp from the headline).

-Food prices provided a further drag as they decelerated slightly from -1.2% yoy to -1.3% yoy. The main surprise however stemmed from non-energy goods which cut 12bp from the headline.

-For the February reading we expect a further drag from the energy component, which should continue to weigh on inflation until the summer of this year, before marginally bottoming out. The rest of the components are expected to remain broadly stable.