It was yet another dovish print from the manufacturing sector with regards to price expectations and as we have been highlighting throughout the year the backbone of the German economy points towards headline inflation hitting 2 % around year-end. Ifo noted that the companies taking part in the survey saw demand weakening this time. We see two key themes that might throw a wrench into the works: The fragile natural gas situation which we have laid out here and then the sticky core part.  

 Chart 1: Ifo hinting at headline inflation hitting 2% at the end of the year