• HICP fell as expected to 5.7%, but CPI was higher than expected and rose to 5.3% in December. 
• The euro saw some initial positive ticks, but state-level data earlier in the day flagged the risk of a positive surprise.  

According to a preliminary estimate published by Destatist this Thursday, Germany's Harmonized Index of Consumer Prices (HICP), which is the ECB's preferred gauge of inflation, fell as expected to 5.7% in December from 6.0% in November. However, MoM HICP was higher than expected at 0.3% versus median forecasts for a drop to 0.2% in December from 0.3% in November. 

The alternative Consumer Price Index (CPI) showed YoY inflation at 5.3% in December, more than the 5.1% median expectation of surveyed analysts and above November's 5.2% rate. The MoM pace of inflation according to the CPI was also higher than expected at 0.5%, above consensus forecasts for an acceleration to 0.4% from -0.2% in November.  

Market Reaction

The euro has seen some minor positive ticks in recent trade, though state-level inflation data released earlier on Thursday did point to stronger than expected YoY CPI and MoM CPI and HICP inflationary pressures.