Spanish inflation figures confounded forecasters this morning, with the country posting a 0.2% increase month-on-month. Data published morning showed that harmonised inflation figures fell -1.2% year-on-year to the month in February, a figure ahead of the predicted-1.5% . While EU politians scramble to avert a bout of continent wide deflation, in Spain, the fall in prices is being used by consumers as a means to boost spending. Indeed, the drop is likely to have a positive impact on figures for Spain´s current account, with an expected surplus of €1.7 billion for the month of December, which means the country ran a surplus for a total of seven months in 2014.
Perhaps of more signifcance to the wider European market, German inflation data is to be published later this afternoon. Forecasters are expecting the figure to drop around -1.3% for the month to February, while overall, the price drop is expected to come in at -0.4%.
Domestic inflation figures will not be the only source of interest to Germans today, as data showing the current state of the Greek economy are also due. Greek GDP figures are forecasted to show the economy grew by 1.6%. German and EU politicians are likely to highlight such growth as a vindication for the austrity on the country, but the Syriza Government have been insisting that such growth is due to the country being caught in “ a deflationary spiral.”
Across the Atlantic, figures for US GDP are likely to show that the economy continues to show strong growth, with forecasts suggesting the economy may have grown as much as 5.0% in the final quarter of 2014.
On the currency markets, the euro has inched up slightly against the dollar after yesterday´s losses and was trading at USD 1.1214 in early trading.