One less thing for Lagarde to worry about?

Please see below the latest ‘Chart of the Week’ from State Street Global Markets


This week Michael Metcalfe, head of Global Macro Strategy, looks at measures of Eurozone deflation.


“Eurozone growth and inflation have faltered badly this year and while growth data is proving stubbornly slow to improve, incoming inflation data should begin to show more constructive news. With headline inflation below one percent, policy makers will be on their guard for the risks of deflation. However, online prices across the Eurozone captured by PriceStats* offer some hope in that regard. Having led official inflation lower in the past sixteen months, online inflation has stabilised and based on current trends should rise into the year-end as price falls this time last year drop out of the calculation. Assuming the official data follow suit, at least one warning sign of deflation, sub-one percent inflation, will have disappeared by the beginning of 2020.”

Source: State Street Global Markets, Bloomberg

*About State Street PriceStats®

PriceStats is a provider of high-frequency global inflation indices that offer insights into key macroeconomic variables. The indices are generated using software that scans the underlying code on public websites to capture the full array of products sold by online retailers, including food, beverages, electronics, apparel, furniture, household products, prescription drugs, and over-the-counter medicines. The technology monitors price fluctuations on roughly five million items sold by hundreds of online retailers in more than 70 countries. The PriceStats methodology is grounded in the extensive body of research of MIT professors Alberto Cavallo and Roberto Rigobon and their Billion Prices Project at MIT. Cavallo and Rigobon have leveraged this research and their expertise in monetary economics to develop the PriceStats indices.

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