BREAKING: German inflation comes in significantly below expectations, EURUSD slips 📉

01:00 PM BST, Germany - Inflation Data for December:

• German HICP: actual 2.0% YoY; forecast 2.2% YoY; previous 2.6% YoY;
• German HICP: actual 0.2% MoM; forecast 0.4% MoM; previous -0.5% MoM;
• German CPI: actual 1.8% YoY; forecast 2.0% YoY; previous 2.3% YoY;
• German CPI: actual 0.0% MoM; forecast 0.3% MoM; previous -0.2% MoM;

German inflation delivered a notable downside surprise in the December flash release, with headline CPI easing to 1.8% y/y (vs. 2.1% expected, 2.3% prior) and coming in flat on the month. The harmonised HICP measure slowed to 2.0% y/y (vs. 2.2% expected, 2.6% prior) and rose 0.2% m/m. On an annual-average basis, CPI is estimated at 2.2% for 2025, while core inflation — CPI excluding food and energy — is provisionally seen at 2.4% y/y in December. The breakdown highlights strong disinflation in goods (0.4% y/y) driven by cheaper energy (-1.3% y/y) and softer food inflation (0.8% y/y), whereas services inflation remained elevated at 3.5% y/y, underscoring lingering domestic price pressures despite the broader cooling trend.

The softer national print was foreshadowed by regional “Land” data earlier in the session, with North Rhine-Westphalia slowing to 1.8% y/y (from 2.3%), Saxony to 1.9% (from 2.2%), and other major states also pointing to a weaker headline profile. EURUSD keeps sliding after the publication.