| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:00 | Japan | Prelim Machine Tool Orders, y/y | January | 0.9% | | -9.7% |
| 07:00 | Germany | CPI, m/m | January | -0.8% | 0.8% | 1% |
| 07:00 | Germany | CPI, y/y | January | 8.6% | 8.9% | 8.7% |
EUR strengthened against most of its major rivals in the European session on Thursday as markets digested the January consumer price index (CPI) report from Germany, the euro area’s largest economy.
The Federal Statistical Office announced its preliminary estimates showed Germany’s annual inflation rate increased to 8.7% in January 2023 from 8.6% in December 2022. Economists had forecast inflation would accelerate to 8.9% in January. Although the print was cooler than expected, it indicated that price pressures are far from over. On monthly basis, the CPI rose 1.0% in January, following a 0.8% decline in the previous month. It should be noted, however, that the latest inflation data were affected by calculation changes, as the base year was moved from 2015 to 2020.
Meanwhile, the harmonized index of consumer prices (HICP), which is calculated for European purposes, fell to 9.2% y/y from 9.6% y/y. Compared to December, the HICP went up 0.5%, following a 1.2% in the previous month.
Despite the January drop, Germany’s EU-harmonized inflation rate remains high, suggesting the ECB should continue hiking its interest rates.