German, Italian headline inflation remains unchanged from flash estimate in December

The German and Italian final inflation figures for the month of December were released today. In the last week, final inflation figures for France and Spain were downwardly revised; however, today’s figures did not see any surprises. German inflation came in at 1.6 percent year-on-year, confirming the preliminary estimate and a slowdown from the prior figure of 1.8 percent year-on-year. The figures indicated that energy price inflation mainly drove the headline figure lower in December, whereas core inflation on the national measure continued to be the same at 1.5 percent year-on-year.

Meanwhile, the Italian final figure also confirmed the flash estimate. The consumer price inflation came in at 1 percent year-on-year, down from November’s 1.1 percent year-on-year. This is the lowest since the beginning of 2016. The core inflation rate in Italy continued to be at 0.4 percent year-on-year.

However, while the releases today suggest that no revisions are likely for the euro area inflation figures, which are set to be released tomorrow, with the headline rate expected to confirm at 1.4 percent, the likelihood of a lower reading is not eliminated entirely.

“We are certainly more confident that the euro area core CPI rate will be left unrevised at 0.9 percent Y/Y”, stated Daiwa Capital Markets Research.

At 17:00 GMT the FxWirePro's Hourly Strength Index of Euro was highly bullish 175.289, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -101.02. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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