Key insights
- German CPI inflation surged to 2.7% in March, with a monthly jump of 1.1%. The report suggests a potential global trend due to the war in Iran. Markets anticipate the ECB to hike rates twice this year, while the Fed is expected to hold. Higher inflation in a major European economy could signal similar trends in the US, potentially delaying Fed rate cuts and negatively impacting US equities.
https://www.fxstreet.com/news/germany-annual-cpi-inflation-jumps-to-27-in-march-202603301217
Annual CPI inflation in Germany jumped to 2.7% in March from only 1.9% in February, Germany's Destatis reported on Monday. On a monthly basis CPI jumped 1.1%.
So these are the first inflation numbers we're getting for the month of March so when the war in Iran broke out. Most likely we'll see similar numbers in the US and elsewhere.
Markets now expect ECB to hike 2 times this year (from Europe's low rate of 2%) and the Fed to hold for the rest of 2026.