Eur/usd - page 148
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German CPI 0.0% vs. 0.0% forecast
German consumer price inflation remained unchanged last month, preliminary official data showed on Thursday.
In a report, Federal Statistical Office Germany said that German CPI remained unchanged at a seasonally adjusted 0.0%, from 0.3% in the preceding month.
Analysts had expected German CPI to remain unchanged at 0.0% last month.
it appears to be a small correction. there are no big movement on the price yet
German Inflation Remains At 4.5-year Low
The Euro has been resilient during the European morning, after the unchanged unemployment rate of Germany.
All European IPC's remained unchanged or higher by 0.1 points over-year basis, indicating that the national inflation rate is also likely to remain unchanged or higher.
However, expectations of robust US data later in the day are likely to give a clear direction to the EUR / USD, if the predictions are right and if there is no occurrence of unanticipated events.
German Retail Sales -1.4% vs. 0.1% forecast
Retail sales in Germany fell unexpectedly last month, official data showed on Friday.
In a report, Destatis said that German Retail Sales fell to a seasonally adjusted -1.4%, from 1.0% in the preceding month whose figure was revised down from 1.3%.
Analysts had expected German Retail Sales to rise 0.1% last month.
Italian Monthly Unemployment Rate 12.6% vs. 12.3% forecast
Italy’s monthly unemployment rate rose unexpectedly in the last quarter, official data showed on Friday.
In a report, Istat said that Italian Monthly Unemployment Rate rose to 12.6%, from 12.3% in the preceding quarter.
Analysts had expected Italian Monthly Unemployment Rate to remain unchanged at 12.3% in the last quarter.
Euro-zone inflation falls to 0.3%, core +0.9% – EUR/USD recovers
The euro-zone flash estimate of inflation was expected to drop to a new bottom of 0.3% y/y in August from 0.4% in July, while core CPI carried expectations for remaining unchanged at 0.8%. This is critical for the ECB decision next week.
EUR/USD was trading around 1.3180 towards the publication. — more coming –
Here is the preview: trading the EZ CPI with EUR/USD
The euro began the week with a Sunday gap and never managed to close it. Draghi made heavy hints that QE is coming and also acknowledged that falling prices are not only a result of temporary factors.
However, later in the week some sources said that a decision now depends on inflation data, making this even more important.
EURUSD tried to close Mondays GAP rallying again during yesterday session, but yet again the 1.32 level has offered resistance. The US dollar looks like it’s still strong, and as a result selling the Euro is the less risky trade to do in this market.
Eurozone inflation falls to 0.3%, as deflation knocks
Eurozone inflation fell to 0.3 percent in August, raising the dangers of deflation and also pressure on the European Central Bank to open up the cash floodgates, data showed on Friday.
The latest fall takes the rate down from 0.4 percent in July and from 1.3 percent a year ago, and to far below the ECB's target of just under 2.0 percent.
The latest twist downwards, against a background of worryingly sluggish eurozone growth, was driven by falls in the prices of food and energy, the European Union's statistical arm Eurostat, which published the figure, said.
Eurostat also reported that the eurozone unemployment rate in July was steady at 11.5 percent from the level in June.
This means that the rate is running at the lowest level since September 2012, and marks a decline from 11.9 percent in July last year.
But the rate is high, and exceptionally high in some countries such as Spain, Greece and Italy.
It is also running at a new record high level in France, which has just been hit by a major political crisis over slow growth, high unemployment and the need for deep reforms.
In July, there were 18.4 million people unemployed in the 18-member countries of the eurozone. However, this was 725,000 fewer than in July last year, but the number of unemployed edged up in the month.
The figures, mainly the inflation data, increase evidence that the eurozone is flirting with deflation, a climate of falling prices which can cause businesses and consumers to delay purchases.
That can further reduce demand and prices and push up unemployment, a spiral which central banks find extremely difficult to counter.
The ECB, which meets on Thursday, has already lowered interest rates to record low levels, even going as far as a negative rate.
The bank, which has a main statutory duty to ensure price stability at just under its target of 2.0 percent, is widely considered to be moving towards quantitative easing.
That is a radical policy of buying securities on a big scale to inject cash into the economy in the hope that this will raise activity, push down the euro and therefore push up prices.
A member of the ECB's policy council, Ewald Nowotny, governor of the Austrian central bank, said late on Thursday that he was "worried" about the outlook for eurozone growth, and that recovery was slower than the ECB had expected.
Low growth tends to cause inflation to fall, as does a high exchange rate.
- Recovery risk -
At Berenberg bank in London, economist Christian Schulz outlined the mix of factors at work in the inflation data which was "likely to feed into more discussions in Frankfurt (ECB) about further policy easing."
"Core inflation actually increased slightly from 0.8 percent to 0.9 percent in August," he said.
"Much more important than inflation rates now is the economic rough patch caused by the crisis in Eastern Ukraine."
This raised the risk "that the Eurozone recovery may be interrupted for longer" holding down inflation for longer. "The ECB is likely to step up its response by December at the latest," he said.
Capital Economics analysts said the underlying inflation data was "very weak" and "should encourage the ECB to offer stronger hints of additional policy support to come after its meeting next week".
The unemployment data showed that the number of people unemployed had risen by 4,000 in the month, the first increase since September 2013 adding to signs that "the labour market recovery is already petering out".
They said that although the ECB was "unlikely to act at its meeting next week, it is likely to hint that quantitative easing is firmly on the table".
EUR/USD drops on cheery U.S. consumer sentiment report
The euro dropped against a firming dollar on Friday after data revealed consumers in the U.S. are far more confident over their economy than markets were expecting.
In U.S. trading, EUR/USD was down 0.20% at 1.3156, up from a session low of 1.3155 and off a high of 1.3196.
The pair was likely to find support at 1.3153, Wednesday's low, and resistance at 1.3220, Thursday's high.
The Thomson Reuters/University of Michigan revised consumer sentiment index came in at 82.5 this month, up from a preliminary reading of 79.2 and exceeding expectations for a reading of 80.1.
July's final reading came in at 81.8, and the uptick in the final August reading bolstered the dollar by keeping expectations firm that the Federal Reserve will close stimulus programs around October and hike interest rates some time in 2015.
Separately, data revealed that the Chicago-area purchasing managers' index rose to 64.3 in August from 52.6 in July, beating expectations for an increase to 56.0.
On a less positive note, the Bureau of Economic Analysis reported that U.S. personal spending fell 0.1% last month, confounding expectations for a 0.2% rise, after an increase of 0.4% in June, though Friday's overall positive data coupled with upbeat reports from earlier this week reminded markets that the days of ultra-loose U.S. monetary policy that have weakened the greenback for years are coming to a close.
On Thursday, the Commerce Department reported that U.S. economy grew at a revised annualized rate of 4.2%, up from a preliminary estimate of 4.0% and better than market forecasts for a downward revision to 3.9%.
Meanwhile in Europe, preliminary data showed that euro zone consumer price index ticked down to an annualized rate of 0.3% this month from 0.4% in July, in line with expectations.
Core consumer price inflation, which excludes food, energy, alcohol, and tobacco, rose to 0.9% in August compared to a year earlier, from 0.8% in July.
Data also showed that the euro zone's unemployment rate remained unchanged at 11.5% last month.
Earlier Friday, official data showed that German retail sales declined 1.4% in July, disappointing expectations for a 0.1% rise, after a revised 1.0% gain in June.
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