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Bob Mason
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It’s been a quiet start to the week on the Eurozone economic calendar. After a particularly quiet Monday, wholesale inflation figures from Germany were in focus this morning.

Wholesale Inflation

In March, Germany’s producer price index rose by 0.9% month-on-month, following a 0.7% rise in February. Economists had forecast a 0.6% increase.

Compared with the same month a year earlier, producer prices of industrial products were up by 3.7%. This was the highest increase when compared with the corresponding month of the preceding year since Nov-2011.

According to Destatis,

  • Prices of energy and prices of intermediate products drive the index northwards year-on-year.
  • Energy prices jumped by 8.0% compared with Mar-2020, with prices of intermediate goods up 5.7%.

Taking a closer look at prices of intermediate goods, price for raw materials saw marked increases year-on-year.

  • Prices of metallic secondary raw material surged by 46.8%.
  • There were also marked increases in prices for:
    • Prepared feeds for animals (+15.9%).
    • Sawn and planed wood (+13.9%).
    • Metals (+12.9%) – Prices of non-ferrous metals were up 17.9%, with prices for basic iron, steel, and ferro-alloys up 17.5%.

For other components,

  • Prices of durable consumer goods increased by a more modest 1.4% and capital goods by 0.9% compared with Mar-2020.
  • As a result of a 20.8% slide in prices for pork, food prices fell by 2.5% that dragged prices of non-durable consumer goods down by 1.4% year-on-year.
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Market Impact

Ahead of the inflation figures, the EUR had fallen to a pre-stat low and current day low $1.20340 before rising to a pre-release high $1.20719.

In response to the stats, the EUR fell to a post-stat low $1.20483 before rising to a post-stat and current day high $1.20800.

At the time of writing, the EUR was up by 0.16% to $1.20578.

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