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Sisyphus

German Unemployment, French And Italian Ppi

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Feb 28th:

German ILO unemployment JAN 8.8% (vs expected 9.2%)

France Jan PPI (YOY) 3.7% (exp 3.2%)

Italy Jan PPI (YOY) 4.7% (exp 4.0%)

previous PPIs revised up. These figures all point in the same direction.

A quarter percent rate rise to 2.5% had already been factored in when the ECB announces rates on Thursday.

The ECB, in the tradition of the Bundesbank, are independant and very hawkish on inflation. Thursday's rise won't be the last.

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Feel really sorry for my mate who has a e300k (40year!!) mortgage. Hes currently on a rate of 2.75%, but I would imagine only a small increase would start to hurt.

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Feel really sorry for my mate who has a e300k (40year!!) mortgage. Hes currently on a rate of 2.75%, but I would imagine only a small increase would start to hurt.

well 2 ECB rate rises might take his mortgage to 3.25% - only an 18% rise! :blink: - no holidays this year I suppose.

In fact it's just as well that we didn't join the Euro, at least we are immune to their inflation and rate rises.

Edited by Sisyphus

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Feb 28th:

German ILO unemployment JAN 8.8% (vs expected 9.2%)

France Jan PPI (YOY) 3.7% (exp 3.2%)

Italy Jan PPI (YOY) 4.7% (exp 4.0%)

previous PPIs revised up. These figures all point in the same direction.

Germany was expecting higher unemployment but got the opposite? figures are not in the same direction?

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Germany was expecting higher unemployment but got the opposite? figures are not in the same direction?

lower unemployment = economy improving (danger of overheating) => rate rises

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lower unemployment = economy improving (danger of overheating) => rate rises

Sorry still not clear

Lower unemployment = economy improving (danger of overheating) => rate rises

France and Italy have higher unemployment = economy worsening => rate reductions

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Sorry still not clear

Lower unemployment = economy improving (danger of overheating) => rate rises

France and Italy have higher unemployment = economy worsening => rate reductions

No, the French and Italian releases were PPI, NOT unemployment.

France Jan PPI (YOY) 3.7% (exp 3.2%)

Italy Jan PPI (YOY) 4.7% (exp 4.0%)

you didn't drink your expresso this morning did you? :)

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Sorry still not clear

Lower unemployment = economy improving (danger of overheating) => rate rises

France and Italy have higher unemployment = economy worsening => rate reductions

ECB mandate officially covers only price stability. If inflation rises, they are bound to raise rates. Remember, these are EU bureaucrats and serve the "greater interest" so a few more unemployed 40 - 50 year olds are expendable. They may be "concerned" but it's only prices that count. My question is how long will the Euro Peoples let this bizarre and highly sterile policy continue?

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Tell me about it – kids ill all last night

Thanks for clearing that up

But just for us who still are not with it- what the hell is PPI

PPI = Producer price index, basically the measure of inflation in wholesale prices.

Producers either have to take these rises on their bottom line or eventually pass them on to consumers, which would later show up in CPI.

An independant central bank like the Fed or ECB take the PPI very seriously.

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ECB mandate officially covers only price stability. If inflation rises, they are bound to raise rates. Remember, these are EU bureaucrats and serve the "greater interest" so a few more unemployed 40 - 50 year olds are expendable. They may be "concerned" but it's only prices that count. My question is how long will the Euro Peoples let this bizarre and highly sterile policy continue?

Well that's a bigger mandate than the BOE who only have to reach the Chancellor's CPI target. The ECB get to look at the complete inflation picture.

The Bundesbank worked very well for Germany for four decades under the same principles.

Toss up between independant civil servants who follow their job description or a rogue Chancellor who does what he pleases.

Maybe a boring ECB that thinks in terms of decades and not 4 yr tems is the real antidote to boom and bust.

Edited by Sisyphus

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PPI = Producer price index, basically the measure of inflation in wholesale prices.

Producers either have to take these rises on their bottom line or eventually pass them on to consumers, which would later show up in CPI.

An independant central bank like the Fed or ECB take the PPI very seriously.

Thanks for clearing that up! I didn't understand it either!

This should help with a stronger Euro against the £, meaning inflation to go up in this country -> interest rate rises -> house price correction?

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Thanks for clearing that up! I didn't understand it either!

This should help with a stronger Euro against the £, meaning inflation to go up in this country -> interest rate rises -> house price correction?

Yes, a lot of property market bulls believe we are immune to what happens elsewhere in the World.

The UKs biggest trading partners are the EU and US. If we don't raise our rates when they do, we will effectively import their inflation. It's hard enough to cover up our own inflation . :lol:

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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