-Mario Draghi, ECB President
It is all about inflation in the 18-nation bloc now. It always was. While the IMF and economists see around a 20-30% deflation risk in the bloc, Mario Draghi see deflation risks abating in the coming months. At the same time, some claim consumer prices will pick up to 0.9% in April.
Another worrying fact occurred Wednesday, as European Statistics Office said producer prices missed analysts' expectations. Even though overall producer prices tend to have a muted impact on the market as Germany and France report the same indicator earlier, PPI is an important part of the region's inflation. Producer prices contracted 1.7% on a yearly basis in March, while on a monthly basis prices fell 0.2%. Core PPI, however, remained unchanged. With overall inflation at a four-year low, and disappointing figures from Germany, a country has been resilient even during the financial crisis, the ECB can start worrying even more.
Also Wednesday, a report showed that Eurozone's growth was revised down in the final quarter, with GDP expanding just 0.2%, compared with 0.3% expected earlier. With muted growth, inflation, and no progress in the labour market, the ECB should consider launching fresh measures to stimulate the struggling economy, even though, analysts do not see a rate cut as an viable option.
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