On Friday, we saw eurozone inflation fall to 1.6% in December, from 1.9% the previous month and below expectations of 1.8%. It is the lowest rate of inflation since April 2017 and as mainly down to a slowdown in the cost of energy, food, alcohol and tobacco. Composite and services PMI readings from Germany and the eurozone all came in below expectations and, while all still showed growth, the readings will be a cause for concern.
The unemployment rate in Germany remained unchanged at 5% as expected, although the number of unemployed people fell by 14,000 which was better than the 11,000 decline the markets had been expecting.
By the time you read this, November’s factory orders and retail sales from Germany will have been released, with December’s construction PMI scheduled for release a little later. We will also see the eurozone’s retail sales figures for November. Tomorrow sees German industrial production figures, as well as services, economic and industrial sentiment figures from the eurozone in December.
