German producer prices grew faster than expected last month, official data revealed on Friday. According to the German Federal Statistics Office (Destatis), the Producer Price Index (PPI) rose 0.2% month-over-month a non-seasonally adjusted basis in July, compared to the 0.4% hike see in the previous month, whereas market analysts anticipated the indicator to come in at 0.1% in the reported month. On an annual basis, producer prices dropped 2.0% in the seventh month of the year, following June's 2.2% fall, while economic desks expected the PPI to fall 2.1% year-over-year in July. In the meantime, energy prices fell 6.2%, whereas durable consumer goods jumped 1.2% and intermediate consumer goods slipped 1.8% in the same month. The data provided evidence that the Euro zone's largest economy recovered slightly from the deflationary pressure. Nevertheless, analysts remain cautions, arguing that there is a strong deflationary pressure coming from the latest sharp increase in the value of the Euro against the British Pound, driven by Britain's decision to leave the European Union. In contrast with the Consumer Price Index (CPI), the PPI measures prices changes at the manufacturing and wholesale level and looks at three areas of production: industry-based, commodity-based and commodity-based final demand-intermediate demand.
Consumer prices in the Euro zone rose slightly on an annual basis in July, official data showed on Thursday. According to final estimates from Eurostat, the Consumer Price Index (CPI) in the region grew 0.2% year-over-year on a non-seasonally adjusted basis last month, up from the 0.1% hike seen in the preceding month and in line with analysts' expectations. On a monthly basis, consumer prices in the 19-nation currency bloc fell 0.6% in July, following the previous month's 0.2% gain and falling behind the 0.4% drop forecast. Meanwhile, so-called core inflation, excluding alcohol, tobacco, food and energy, jumped 0.9% on a yearly basis in the same month, unchanged from last month's reading and in line with market expectations. Energy prices fell 6.7% on an annual basis and 1.0% on a monthly basis, whereas prices for services, the largest component of the bloc's economy, increased 1.2% year-over-year. Back in June, the annual rate of inflation in the Euro zone rose 0.1% for the first time since January. In December 2015, the Euro zone fell into deflation for the first time since October 2009, forcing the European Central Bank (ECB) to launch its massive quantitative easing programme. The main objective of the central bank's monetary policy is to reach price stability across the region. The ECB strives for an inflation rate of below, but close to, 2% over the medium term. June
Upcoming fundamentals: PMIs from Europe
The markets will be quiet during Monday's trading session, as no notable, fundamental data releases are set to be made during the session. However, traders have to wake up early on Tuesday, as beginning at 7:00 GMT PMI data will start flowing in from the EU. The PMI data will consist of three indicators for each country for August, which are the Flash PMI Manufacturing, Flash PMI Services and PMI Composite. First three will be released by the French at 7:00 GMT. Afterwards, the Germans are set to announce their data at 7:30 GMT. Last but not least from the notable indicators will be the common PMI's for the EU at 8:00 GMT.
EUR/USD retreats below 1.13 mark on Monday
Daily chart: The common European currency began a retreat against the US Dollar on Friday, and the pair continues to move lower on Monday, as by 5:00 GMT it had reached below the newly formed, weekly PP at 1.1281. As the weekly PP's support has been passed, it is most likely that the currency exchange rate will find support in the monthly R1 at 1.1263 and rebound against this level. In addition, the daily aggregate technical indicators forecast a surge for the pair during today's trading session.Traders increase bearish sentiment on Monday
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade at 1.10 in November
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between July 22 and August 22 expect, on average, the currency pair around 1.10 by the end of October. Though 54% (+1%) of participants believe the exchange rate will be generally below 1.10 in ninety days, with 30% alone seeing it below 1.06. Alongside, 37% (-2%) of those surveyed reckon the price will trade in the range between 1.11 and 1.18 on October 30.