Germany Inflation Jumps In April

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Germany Inflation Jumps In April

Germany'S Inflation Jumps To 2.4% During April

The Federal statistics office has released the inflation data for April, which shows a surprising jump from earlier readings. According to the data, a 2.% y/y increase was seen in German inflation during the month.

And if we look at Germany's core inflation without the energy and food prices, the increase in April was 3.0%. This was lower from the March's reading of 3.3%. This suggest that the increase in inflation is mainly driven by food and energy prices.

Euro Zone Inflation Expected To Be 2.4%

The inflation numbers from Germany are closely watched by economists and traders alike. After all, it is used to understand the inflation situation in the entire EU. Another reason why Germany's inflation numbers are so important is that they release ahead of the EU inflation data.

The economists are expecting the Euro Zone inflation to be near 2.4%, similar to the reading from the previous month. However, there's no telling that the actual reading will be in line with the forecasts. After all, there's a good chance that the EU inflation might also surprise the markets, just like in the case of Germany and the USA.

For now, the European Central Bank (ECB) has given enough signals that the borrowing costs will start to go lower from June 2024.

However, the only obstacle between the first rate cut by the ECB in 2024 is the upcoming European inflation numbers. If the EU inflation is a surprise, things will be difficult for the ECB.

In fact, any of the upcoming monthly Euro zone inflation numbers could upset the delicate timing of the first rate cut by the ECB.

Given the inflation surprises seen in the USA, Germany, & few other economies, everything's on the cards! So while the forecast is expecting the inflation to stay the same, there are equal chances of an upward surprise.

It is also important to note that the reading of 2.4% in April is still higher than the 2.0% target set by the central bank.

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