Fall in German CPI is of no consequence to the euro

German regional CPI numbers drop in December 2017

The only data left today is German inflation for Dec. The regionals have been out and here’s the results (all y/y);

Saxony 1.7% vs 2.0% prior
Hesse 1.7% vs 2.0% prior
Bavaria 1.7% vs 1.8% prior
North Rhine 1.5% vs 1.8% prior
Baden W 1.8% unch

That’s a sizeable drop in some but it is a bit of a reversal from a strong jump we saw last month. The euro has pretty much ignored the numbers, and that’s mostly because the market was/is expecting a softer month anyway. The main German number is out at 13.00 GMT and HICP is expected in at 1.4% vs 1.8% prior, with CPI expected at 1.5% vs 1.8% prior. The HICP number looks a little too wide at a 4pp change so keep an eye out if it comes in above. I’d paint it more at 1.5%, though I’m not sure there’s many traders trading the data anyway.

Update: Here’s the headline numbers out at 13.00 GMT;