Asset Purchases And Continued Deflation by Jennifer Thomson, Gavekal Capital Blog

We’ve noted quite a few data releases that point to deflationary trends recently– see here, here, and here for details.

Following a rebound from the sharp drop in January of this year, preliminary figures indicate that inflation is back in negative territory for Germany:

 

Asset Purchases

And it isn’t just consumer prices– import prices have been falling since May and export prices have been at or below 0% growth on a month-over-month basis for the last three months:

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Spain, too, released consumer price data that was more negative than last month and lower than the consensus expectations:

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With few signs of inflationary pressures anywhere in the Eurozone, it seems reasonable to expect little movement toward the ECB’s official 2% target when Eurostat releases consumer prices tomorrow:

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All of this is to say that the ECB’s asset purchase program intent on moving inflation up towards 2% does not seem to be doing so just yet:

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