German Inflation
Nothing to do with zeppelins this time, but more to do with German Consumer Price Inflation coming in higher than expected yesterday at up 2.6%. This was a set back for those calling for a cut in EUR interest rates as the mood swung towards the likelihood of the European Central Bank holding off and exercising more caution on that front.
EUR/GBP 0.8421.
Two Speed EU
It was ever thus but in a further example of the challenges faced by the ECB due to some countries being at different stages of the economic cycle to others, in Q2 the EU as a whole grew by 0.3% while Germany contracted by 0.1%. Ireland, Lithuania and Spain were at the top of the performance tree ranging between +1.2% and +0.8% while Latvia, Sweden and Hungary languished at the foot of the table ranging between -0.2% and -1.1%.
EUR/JPY 166.95.