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Enron Mail |
*** PDF version incl. charts is attached ***
German inflation falls more strongly than expected Nov 01 Actual UBSW fc Market Previous CPI - mom% -0.2 0.0 0.0 -0.3 CPI ? yoy% 1.7 1.9 1.9 2.0 n German CPI inflation dropped from 2.0% in October to 1.7% in the month to mid-November. Thi swas 0.2%pts lower than expected. The outcome is a consequence of sharply falling energy and food prices. Core inflation will have remained unchanged. Pipeline inflation indicators released yesterday underpinned the favourable trend. n In the absence of further oil price decline, inflation is likely to rise slightly next month. Further significant declines are expected from February 2002, taking German inflation below 1% by the middle of the year. If this is only partly mirrored in other euro area economies, the ECB will have leeway to cut rates further next year as we expect. Food and energy prices were the main forces behind the inflation decline in November. From the state data, we estimate that food price inflation will have fallen from 6.6% to about 5.5% yoy. Household energy prices dropped by about 1.6% mom reflecting a substantial heating oil price decline and petrol prices fell between 0.8% and 3.4% in the reporting states. Core inflation will barely have changed from last month?s 1.8%. The favourable German inflation picture was preceded by much larger than expected declines in October produce r and import prices reported yesterday. Altogether, the data of the last two days underpin our forecast that both headline and core inflation will fall substantially next year. Hence, our forecast of further ECB easing in 2002 Q1 remains firmly in place. _______________________________________________ Holger Fahrinkrug Senior Economist UBS Warburg AG Stephanstra?e 14-16, D-60313 Frankfurt, Germany Tel. +49 69 1369 8280 Fax +49 69 1369 8221 Email: holger.fahrinkrug@ubsw.com Visit our website at http://www.ubswarburg.com This message contains confidential information and is intended only for the individual named. If you are not the named addressee you should not disseminate, distribute or copy this e-mail. Please notify the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system. E-mail transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender therefore does not accept liability for any errors or omissions in the contents of this message which arise as a result of e-mail transmission. If verification is required please request a hard-copy version. This message is provided for informational purposes and should not be construed as a solicitation or offer to buy or sell any securities or related financial instruments.
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