Home Business News German data comes with no surprise, political risks remain

German data comes with no surprise, political risks remain

12th Jun 24 9:28 am

This morning’s German inflation data brought no surprises whatsoever, with both CPI and HICP metrics unrevised at 2.4% YoY and 2.8% YoY respectively.

In any case, volatility in European FI is likely to be driven primarily by political developments for the time being, as we approach French legislative elections towards the end of the month.

The French-German 10y spread hit its widest  since 2020 yesterday, an obvious sign of market jitters increasing about the potential for a victory for Le Pen’s RN party, and a likely headwind for the EUR, given the typical inverse correlation between spot EUR/USD and eurozone spreads.

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