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In some regions of Germany in June inflation managed to beat the ECB’s objective, as follows from Thursday’s data. It undoubtedly indicates a reliable consumer demand and also underpins the ECB's decision to cease the bond purchase program in December.
With the strengthening inflation in the EU, the European bloc’s major bank told earlier that it’s on the verge of ending its bond purchase program, which was launched in times of economic downtime and initially intended to avert deflation and boost the economy.
The given decision actually reflects uncertainties, which impact the euro zone area, including trade tensions between China, America and the European Union.
As a matter of fact, annual inflation in the most densely populated region of this European country, North Rhine-Westphalia, managed to surpass the ECB's objective of under 2%. This indicator kept to 2.1% in June, which is mostly because of higher prices for food, transport and energy.
Annual inflation managed to ascend to 2.4% from 2.3% in Bavaria, and the indicators in the lands of Baden-Württemberg, Saxony and Brandenburg also surpassed the ECB's objective.
Regional inflation indicators that aren’t coordinated with other members of the EU, will be available in national inflation data to be uncovered a bit later.
A survey conducted by Reuters before publishing regional data informed that the level of Germany’s harmonized inflation would sink to about 2.1% in June versus 2.2% the previous month.
Another indication of soaring inflation in the European Union were Spanish consumer prices – they tacked on in June at the fastest tempo since April last year, also beating the ECB’s goal.
On Friday, the euro zone is going to uncover preliminary data for June inflation. According to a Reuters survey, it’s anticipated that the annual rate is going to soar to 2% from May’s reading of 1.9%.
All attention on the market is on the Brexit process. Fears over the no-deal Brexit pushed the British pound deep down yesterday after UK Prime Minister Boris Johnson claimed he was ready to abandon negotiations.
The market sentiment is mixed, and the US dollar is trading near the lowest levels for over two years. Let’s have a look at the main market movements today.
The market sentiment deteriorated because of the election uncertainty and worries about rising virus cases all over the world. Let's make some analysis!
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
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