We're seeing some big moves from the German regions

Here's the latest and what's been out so far (all y/y)

  • Saxony -0.1% vs +0.4% prior
  • Brandenburg -0.4% vs +0.3% prior
  • Hesse -0.3% vs +0.3% prior
  • Bavaria -0.1% vs +0.7% prior
  • Baden Wuerttemberg -0.3% v s+0.3% prior
  • North Rhine +0.1% vs +0.6% prior

North Rhine the only one posting positive inflation. Those are pretty big shifts and that's helped tip the euro lower. Draghi & Co has said that Eurozone CPI could turn negative this year and these numbers will be telling the market they may be right. Given the closeness to the ECB meeting, this data will be further confirmation that the ECB will act.

We might also need to think about seeing the main German number come out worse than expected. Currently HICP is estimated at 0.0% vs 0.4% prior y/y and CPI at 0.1% vs 0.5% prior y/y. That's at 13.00 GMT

Before then we have the Eurozone economic sentiment data which will include the final consumer confidence number and more importantly, the consumer inflation expectations (2.3 prior, selling price expectations -4.2 prior). If we see another big drop there the euro could find itself under more pressure.

Until then we're just holding above 1.1000 at 1.008, down from 1.1065 not long ago

EURUSD 15m chart