Heads Up: Latest Germany States' CPI Readings and Impact on ECB Strategy

Germany States' CPI Readings Today

The estimates are calling for another drop in headline annual inflation in Germany for February. The reading is expected to decline to 2.6%, down from 2.9% in January. However, the monthly estimate is expected to show a 0.5% increase in price pressures.

The annual reading is to keep with the disinflation trend and bolster the ongoing narrative from the ECB. However, the core reading might still prove to be sticky closer to 3%, posing a challenge for the central bank to reach the 2% target.

For now, this data could lead to rate adjustments by the ECB, but continuous inflation pressures in the latter half of 2024 may pose a significant challenge.