Euro-area PPI Actual -1.3%, Expected -1.1%, Previous -2.0% (Revised from -1.9%)

Release Explanation: The PPI measures the rate of inflation of manufacturers when purchasing Goods and Services; the rate of Inflation at the factory Gate. An increase in the price of raw Goods and services usually gets passed on to the consumer, therefore this is the first stage on Retail Inflation.

Trade Desk Thoughts: The Euro-area PPI shows that the pace of inflation is starting to slow at a strong pace. Producer prices dropped a 1.3% in December, following a record drop just one month before, of 2.0% (revised)

The PPI read, excluding the energy sector, fell by 0.6% in December, much more than in the previous months. The energy component alone fell 3.7%, the second biggest monthly decline recorded. The year over year PPI read stands at only 1.8%, even though earlier this year, in July, it peaked at 9.2%. In December, the producer price index fell for the fifth consecutive month, the longest streak since 1999.

Forex Technical Reaction: The euro was unmoved by the release. The pair is trading near the Asian open price, and slightly above the neutral pivot point (1.2805), even though it rose 100 pips in the Asian session.