- Berenberg
Deflationary pressure in both Germany and Spain eased in March, helped by recovery from the sharpest slump last year amid falling oil prices. Consumer price index in the fourth largest economy of the Euro zone was released ahead of expectations, declining 0.7% on the annual basis, against a forecast of a 0.9% drop and up from a 1.2% decrease in February. Alongside, German annual inflation came out at 0.3% this month, up from 0.1% in February and in line with the majority of analysts' predictions. The data is pointing on easing negative effect provided by slump in crude oil prices over past nine months. In addition to that, inflation expectations seem to be improving amid the recently-launched QE programme by the European Central Bank, with manufacturing activity and labour markets rebounding as well.
Meanwhile, economic sentiment in the common currency bloc gained further ground and hit its strongest level in more than three years. The reading of consumer confidence, calculated by the European Commission, advanced to 103.9 points in the current month from 102.3 in the preceding month, the biggest mark since June 2011. Additionally, a positive change was also registered by other statistical indicators in the Euro area, including business climate, industrial confidence and sentiment in the services sector of the monetary union's economy.
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