Can Mario Draghi start the money-printers in the basement of the ECB in Frankfurt to counteract weak inflation? Yes, that’s for sure. Of course, new money is created at the push of a button. But it sounds much nicer to speak of a printer. Only a few days ago Mario Draghi announced that the ECB could start new bond purchases if necessary.
Today at 2 p.m. the Federal Statistical Office publishes the German consumer prices (inflation) for June. A level as in the previous month of 1.4% is expected. Is the figure getting weaker? Let’s take a look at Spain at the moment. The state statistics authority published its June data for consumer prices early this morning. And look: the rate has just halved from 0.8% in May to 0.4% in June! In April it was still 1.5%. The official chart shows how much the inflation rate in Spain is currently rushing towards the zero line. The monthly comparison from May to June even shows a minus of 0.1%!
With 46 million inhabitants, Spain is one of the most populous member states in the Eurozone, a heavyweight, indeed. Thus, with such a disastrous crash, it also clearly influences the overall average for the Eurozone. So we can be very excited about today’s figures from Germany, and above all, where Eurostat will be reporting tomorrow, Friday, the overall average for the euro zone! If the data turns out to be worse than expected, this should of course weaken the euro.