Inflation Increases to 0% in Euro Area

Annual inflation for March was 0% for the euro area according to the latest figures released by Eurostat, this was a rise on the negative 0.2% recorded for February, but the figure is still way behind the European Central Bank’s inflation target of 2%.

While the European Union as a whole, is still in a deflationary spiral as inflation for March was a minus 0.1%.

Year on year the data for March was also relatively positive, as a deflationary figure of 0.1% was recorded.

After the individual inflation figures had been broken down, the annual lowest figures were registered in Romania on minus 2.4%, Cyprus minus 2.2%, and Bulgaria minus 1.9%.

In contrast, the highest annual rates were recorded in Belgium 1.6%, Sweden 1.2%, and Malta 1%.

In total, there was 15 EU member states which recorded negative annual rates, compared with February 2016, annual inflation fell in eleven member states, remained stable in seven and rose in nine.

Fuels for transport where priced fell by 0.60%, in addition to heating oil and gas which declined by 0.23% pp and 0.10% respectively, had the most influential downward impacts. on prices.

While the highest boosts to prices arrived from restaurants and cafes on 0.12%
,package holidays 0.09%, and rents 0.07%.

Pound Slides Against the US Dollar

The UK pound has continued to depreciate against the US Dollar this morning GMT, as the GBP/USD rate is currently $1.41, slipping from $1.42, continuing the same trend that the pound has suffered against the greenback over the past 24 hours.

Fears over an exit from the EU continue to plague sterling, and later today the Bank of England will release its latest decision on interest rates.

The dollar has gained ground on the UK pound, despite disappointing producer price index reports for March, as final demand on the index fell by 0.1%.

The EUR/USD rate has also favoured the dollar, as the euro is purchasing $1.12, this is only a slight fall so far today CET, but yesterday the euro was reached the £1.13 and peaked over that level, early yesterday afternoon.

Yesterday’s euro area industrial production results, which reported a fall of 0.8% for February was thought to be worse than expected, according to several analysts.

LMAX Exchange in their daily review of the forex markets, said that the intensified demand for risk assets and its related flow, is expected to weigh heavily on the progress of the euro.

They expect that the markets will rotate into commodities and emerging market foreign exchange.

Despite the lower than expected industrial production results released by eurostat, LMAX Exchange believe that this was more than offset by the negative producer index prices in the United States.

Other market catalysts may centre around solid China trade data, and encouraging JP Morgan earnings.

German Business Insolvencies Down 2.7% in January

Local courts in Germany have disclosed that there were 1,692 business insolvencies in January 2016, a reduction of 2.7% in comparison to the same month a year ago.

The amount of debt that is owed to prospective creditors increased by 0.1 billion euros year on year, up to 1.2 billion euros.

These figures were reached through the level of business insolvency requests.