Contact

A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

News

 

Inflationary pressures easing in euro zone


Inflationary pressures in the euro zone remain in a downtrend, likely adding to fears about deflation in the 18-nation bloc, an indicator designed to predict cyclical trends showed.

The Eurozone Future Inflation Gauge (EZFIG), published by the Economic Cycle Research Institute, nudged down to 91.7 in December from November's 92.0.

"While the EZFIG had increased since the summer, it slipped in its latest reading and remains in a cyclical downtrend. Thus, euro zone inflation pressures are still quite weak," said Lakshman Achuthan, ECRI's chief operations officer.

Purchasing managers surveys out this week showed businesses were forced to cut prices in January for the 22nd month in a row to drum up business.

The European Central Bank left monetary policy on hold at its monthly meeting on Thursday, despite inflation being well below its target of close to 2 percent.

Consumer prices rose just 0.7 percent in January, down from 0.8 percent in December and confounding expectations for a rise to 0.9 percent.

"There is certainly going to be subdued inflation, low inflation for an extended, protracted period of time, but no deflation," ECB President Mario Draghi said on Thursday.

 

VIEW THIS ARTICLE ON REUTERS

Related News & Events

Secular Stagnation

Fox Business News January 22, 2014

GDP growth (yoy) has been less than 2% for four straight quarters, something we’ve never seen except during or right after a recession. More