German Wholesale Inflation Raises Yet More Red Flags, while Lagarde Sends the EUR South

After a quiet session on the Asian economic calendar, German wholesale inflation was in focus this morning.

Wholesale Inflation

In October, Germany’s producer prices for industrial products jumped by 3.8% versus a forecasted 2.3%. The PPI had risen by 1.4% in September.

Germany’s wholesale annual rate of inflation accelerated from 14.2% to 18.4%. Economists had forecast 15.7%.

According to Destatis,

• Energy prices as a whole were up 48.2% compared with Oct-2021 and by 12.1% compared with Sep-2021.
• Natural gas surged by 81.4%, year-on-year and electricity by 49.6%, pushing prices higher compared with Oct-2020.
• Excluding energy, the index was up 9.2% on Oct-2020.
• Prices of intermediate goods increased 18.1% compared with Oct-2020 and by 0.9% compared with Sep-2021.
• For durable consumer goods, prices increased by 3.4% compared with Oct-2020.
• Prices of non-durable goods increased 3.0% compared to Oct-2020 and by 0.5% month-on-month.

ECB President Lagarde

On the monetary policy front, ECB President Lagarde delivered a speech at the 31^st Frankfurt European Banking Congress.

As with speeches from earlier in the week, the ECB President assured unwavering policy support.  EUR sensitivity was evident to the comments.

See here for the content of ECB President Lagarde’s speech.

Market Impact

Ahead of today’s stats, the EUR had risen to a pre-stat and current day high $1.13731 before hitting reverse.

In response today’s PPI numbers and Lagarde speech, the EUR rose to a post-release high $1.13589 before falling to a post-stat and current day low $1.13110.

At the time of writing, the EUR was down by 0.47% to $1.13178.

Next Up

From the U.S, there are no material stats to influence later in the day.

Monetary policy chatter will draw interest, however.

FOMC members Waller and Clarida are scheduled to speak ahead of ECB President Lagarde, who is due to deliver a 2^nd speech of the day.