Published on: 2023-08-23
German PPI plunged
German producer prices decreased more than expected on the year in July, their first fall in over two-and-a-half years.
The 6% drop in prices was driven largely by falling wholesale energy prices. Economist polled by Reuters had predicted a fall of 5.1%.
While energy producer prices dropped 19.3%, food producer prices rose 9.2%. The ECB is keeping a close eye on data to judge what impact it would have on inflation.
The deep contraction could bolster the case for ECB to pause or at least skip at the September meeting, said Oliver Rakau, an economist at consultancy Oxford Economics.
That Germany entered a technical recession has already complicated the ECB’s policy path. Europe's largest economy contracted by 0.1% in the first quarter of 2023 and by 0.4% in the last quarter of 2022.
Big firms in the bloc are recording stagnating activity levels and see no improvement in the current quarter with risks tilted towards even more negative outcomes, the ECB said based on a survey of large firms in July.
Goldman Sachs said in a note to clients on Monday that it expected annual core eurozone inflation to remain above 5% until September and to only fall to 4% by the end of the year.
Core UK inflation softened
Core inflation in the UK has finally begun to fall in the past two months, according to the Office for National Statistics.
The underlying annual rate is found to have dropped to 6.8% in July, down from 7% the previous quarter, it said in an article on Monday.
The estimate represents a more sophisticated statistical analysis based on a new ONS methodology. That tries to works out the ‘common trend component’ that shows the rate of price rises across all goods and services.
The official figure showed that core inflation — which excludes volatile energy, food, alcohol and tobacco prices — stayed 6.9%, above a consensus forecast of 6.8%.
Average UK earnings excluding bonuses rose by 7.8% in July from the year before, the highest level recorded.
Traders are now fully pricing in a rate hike of 25bps at the next policy meeting. However the conflicting data are giving BOE headache as the country’s labour market is cooling.
The UK unemployment rate increased by 0.2 percentage points to 4.2% in June, while the ratio of unfilled job vacancies to unemployed workers now stands at 0.73, down from a peak of almost 1.1.
Samuel Tombs, a UK analyst at Pantheon Macroeconomics, said it usually takes time for changes in the labour market to feed through to wage growth, and that earnings growth may well have topped out.
World's Best Broker
EBC Financial Group is a co-brand shared by a group of entities
including:
EBC Financial Group (SVG) LLC is authorized by the St.Vincent and the
Grenadines Financial Services Authority(SVGFSA),and the company
registration number is 353 LLC 2020, with registered address at Euro
House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the
Grenadines.
Other Relevant Entities
EBC Financial Group (UK) Limited is authorised and regulated by the
Financial Conduct Authority. Reference Number: 927552. Website: www.ebcfin.co.uk
EBC Financial Group (Cayman) Limited is licensed and regulated by the
Cayman Islands Monetary Authority (Number: 2038223). Website:
www.ebcgroup.ky
EBC Financial (MU) Limited is licensed and regulated by the the
Financial Services Commission, Mauritius (License Number GB24203273)
with registrated address at 3rd Floor, Standard Chartered Tower,
Cybercity, Ebene, 72201, Republic of Mauritius. Website for this entity
is maintained separately.
EBC Financial Group (Comoros) Limited is authorised by The Autonomous
Island of Anjouan, Union of Comoros Offshore Finance Authority with
License number L 15637/EFGC, with registered office address at Hamchako,
Mutsamudu, Autonomous Island of Anjouan, Union of Comoros.
EBC Financial Group (Australia) Pty Ltd (ACN: 619 073 237) is authorised
and regulated by the Australian Securities and Investments Commission
(Number: 500991). EBC Financial Group (Australia) Pty Ltd is a related
entity of EBC Financial Group (SVG) LLC. The two entities are managed
separately. The financial products and services offered on this website
are NOT provided by the Australian entity and no recourse against the
Australian entity is available.
EBC Group (Cyprus) Ltd, faciliates payment services to the licensed and
regulated entities within the EBC Financial Group strucutre, registered
under the Companies Law of Republic of Cyprus with the number HE 449205,
registered office address at 101 Gladstonos, Agathangelou Business
Centre, 3032 Limassol, Cyprus.
Business Address: The Leadenhall Building, 122 Leadenhall Street, London, United Kingdom, EC3V 4AB. Email Address :cs@ebc.com . Telephone : +44 20 3376 9662
Regional Restrictions:
EBC does not offer any services to citizens and residents of certain
jurisdictions including: Afghanistan, Belarus, Burma (Myanmar), Canada,
Central African Republic, Congo, Cuba, Democratic Republic of the Congo,
Eritrea, Haiti, Iran, Iraq, Lebanon, Libya, Malaysia, Mali, North Korea
(Democratic People's Republic of Korea), Russia, Somalia, Sudan, South
Sudan, Syria, Ukraine (including Crimea, Donetsk, and Luhansk Regions),
the United States, Venezuela, and Yemen.
Any Spanish on this website is for LATAM only and is not designated for
anyone in European Union or Spain For more information, please check out
our FAQs.
Any Portuguese on this website is for Africa only, and is not designated
for anyone in European Union or Portugal or Brazil. For more
information, please check out our FAQs.
Compliance Disclosure：The website can be accessed globally and is not specific to any entity. Your actual rights and obligations will be determined based on the entity and jurisdiction that you choose to be regulated.There may be local laws and regulations which prohibit or limit your rights to access, download, distribute, disseminate, share or otherwise use any or all of the documents and information published on this website.
Risk Warning: Trading Contracts for Difference (CFDs) are complex financial instruments and come with a high risk of losing money rapidly due to leverage. Trade on margin carries a high level of risk and may not be suitable for all investors. Before deciding to trade Forex and CFDs, you should carefully consider your trading objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial trading capital. We recommend that you seek independent advice and ensure you fully understand the risks involved before making any investment decision. Please read the relevant risk disclosure statements carefully before trading.
