German PPI yoy slowed again with a -1.7% released today for January much lower than expected at -1.4% and even lower than last month’s figure -0.9. Add lack of inflationary pressure crude oil prices which look to remain low for the foreseeable future and the ECBs challenge to increase inflation to the 2% target looks daunting. Talk of more QE looks more likely at this point, suggesting new lows on EUR/USD. German bond yields are also extremely low only encouraging investors to switch to bonds with higher yields like US Treasuries.

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