-Mario Draghi, ECB President
Interesting how sentiment can change over the day. First, Mario Draghi claimed that the ECB is still far from engaging in the U.S.-style bond purchases in order to bolster bloc's economic recovery and inflation. Draghi claimed that around 40 members of Germany's grand coalition can spur doubts amid investors that the ECB would weigh all stimulus measures in the coming months. It is still an option, however, after the latest comments the possibility it will be announced, decreased significantly. Earlier this month Angela Merkel warned German lawmakers against excessively spreading deflation fears during the conversation with Mario Draghi.
Tuesday's report changed it all. Policymakers were hoping for a rebound in consumer prices in April and a solid figure would definitely ease pressure on the ECB. A report from the Destatis showed that inflation in Germany accelerated less than expected, with CPI rising 1.1% up from 0.9% a month earlier. Analysts expected a reading of 1.3%. On a monthly basis the cost of living in Europe's powerhouse shed 0.2%, more than the expectations of a mere 0.1% decline. In March, consumer prices picked up 0.3%. On Wednesday, the Eurostat will unveil a broader measure of inflation for the whole region, but keeping in mind Germany accounts for a vast majority of overall economic activity, the report has a potential to surprise markets to the downside.
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