The ECB will explain away the drop in German HICP as unfavorable “base-effects”, conparisons to over-inflated year ago levels when oil was soaring. So, whatever you do, do NOT call falling prices deflation. That would annoy M. Trichet….
HICP fell -0.2% in May and 0.1% y/y.
EUR/USD is stabilizing after retracing its session range in one hour. It is now at 1.3907.
