Release Explanation: The CPI measures the average price of a fixed market basket of goods and services purchased by consumers, and therefore give an overall read of Inflationary pressures. It is the most widely used Inflation indicator of Central Banks, Institutions, and Governments. It is used to calculate Cost of Living numbers for Government programs. Each regional Central Bank will have their own CPI Target rate, and each will differ in line with the way they individually want to control the aspects of their own economies.
Trade Desk Thoughts: The German CPI fell by 0.5% in January, in-line with the market’s expectations. Last month, in December, the German CPI rose for the first time in the last 5 month. Year-over-year inflation in Germany reached 0.9%, dragged lower by the huge declines seen in the energy market.
Forex Technical Reaction: The euro trades near the neutral pivot point (1.2930), and slightly above the Asian open price.