17 Mar 2016
Inflation Sensation: A global inflation monitor – Deutsche Bank
Research Team at Deutsche Bank, suggests that the “Inflation Sensation” is their global inflation monitor which includes more than 150 time series covering consumer prices, producer prices, inflation surveys and wages across the G10.
Key Quotes
“We use PCA analysis to provide a global snapshot of where different countries stand on inflation.
• At a global level, our monitor remains a “sea of blue”. Little progress has been made in generating inflation in recent months. The most notable downward price pressures are in the Euro-area, Switzerland, New Zealand and Australia.
• Our monitor is also flagging inflation “greenshoots” however. The US, Canada, Norway and Sweden stand out as countries were inflation progress has been made. Inflation expectations remain weak though. Japan stands at the opposite end of the spectrum. Having seen a burst of reflation over the last two years, price developments have taken a turn for the worse.
• Wage developments are striking across the G10. While there are tentative signs of producer and consumer price disinflation bottoming in some countries, wage growth remains particularly weak. This may be because wages are a backward looking indicator of inflation pressure, but it may also be a sign of second-round effects influencing price-setting behaviour.
• Australia and New Zealand are flagging “blue” as the two economies with the biggest disinflationary pressures outside of Europe. New Zealand in particular is sending worrying signs of slippage across all price fronts.”
Key Quotes
“We use PCA analysis to provide a global snapshot of where different countries stand on inflation.
• At a global level, our monitor remains a “sea of blue”. Little progress has been made in generating inflation in recent months. The most notable downward price pressures are in the Euro-area, Switzerland, New Zealand and Australia.
• Our monitor is also flagging inflation “greenshoots” however. The US, Canada, Norway and Sweden stand out as countries were inflation progress has been made. Inflation expectations remain weak though. Japan stands at the opposite end of the spectrum. Having seen a burst of reflation over the last two years, price developments have taken a turn for the worse.
• Wage developments are striking across the G10. While there are tentative signs of producer and consumer price disinflation bottoming in some countries, wage growth remains particularly weak. This may be because wages are a backward looking indicator of inflation pressure, but it may also be a sign of second-round effects influencing price-setting behaviour.
• Australia and New Zealand are flagging “blue” as the two economies with the biggest disinflationary pressures outside of Europe. New Zealand in particular is sending worrying signs of slippage across all price fronts.”