Eurozone: No surprise in inflation data, disappointing German IFO data - TDS

Analysts at TD Securities note that the German IFO survey disappointed broadly to the downside, indicating that sentiment still has yet to recover.

Key Quotes

“The current conditions index slipped lower to 103.4 (mkt: 103.9) while expectations dipped to 93.8 (mkt: 94.3). The latter is effectively at the lows reached during the euro crisis. While largely disappointing, some clarity on the US-China trade deal in the next month could allow for the long-awaited rebound in sentiment in March.”

“Eurozone core inflation was confirmed at 1.1% in January (up from 0.9%) and as expected, package holidays accounted for much of the increase (a +12bp contribution). That said, core inflation ex package holidays still firmed, to 1.0% up from 0.9%, led by both services and goods. That is a positive development, though a break out of recent ranges remains to be seen and we remain cautious in the near term.”