Good morning from Europe.

German wholesale prices rose by 0.4% in April, a figure notably above the 10-year average, signaling re-accelerating inflationary pressures beyond the US. This uptick in prices is indicative of a broader trend where inflation dynamics are gaining momentum in various parts of the world, reshaping market expectations.

The repricing of inflation outside of the United States is one of the reasons why the USD is trading on the backfoot (especially) versus European FX), as investors reassess their positions in light of these global inflationary trends.

Chart 1: Wholesale prices are rising (faster) again in Germany