Research Team at TDS, suggests that the flash February inflation data for Germany (incl regional), France, and Spain all likely showed a sharp drop in inflation momentum, and they see downside risks to consensus.
Key Quotes
“German HICP likely dropped back into deflationary territory, to -0.1%y/y (consensus: 0.0%), and the new preliminary French HICP measure likely decelerated to 0.0% y/y (consensus: 0.1%).
Markets expect Spain to post -0.6% y/y. This decline in momentum is mainly driven by base energy effects, as pump prices increased in Feb ’16 against a decline in Feb ’15.”
(Market News Provided by FXstreet)