Ifo Nugget: Smells like disinflation
Looking at short-term price expectations we note that price expectations in manufacturing were almost unchanged from last month while still pointing towards headline HICP printing at around or even below 2% YoY. In services ex real estate the reacceleration we had seen over the last 4-6 months turned.
Chart 1.a: Price expectations in manufacturing vs headline HICP
Chart 1.b: Price expectations in services vs core HICP
If it quacks and walks like a duck, it probably is a duck. The same can be said about the disinflationary wave in Europe, which got more confirmation with today’s full Ifo report.