Euro zone growth dynamics solid, while inflation dynamics weak

Today's series of data from Euro zone economy shows that economic activities have remained solid in Euro Zone.

• Survey shows that businesses are more confident over future growth and rise in consumption. Retail sales in Spain went up and recorded 4.3% growth in September from a year ago, compared to 3% in August.

However inflation dynamics have been weak across Euro zone.

• Flash reading on HICP inflation in Spain showed price is down -0.9% in October compared to -1.1% in September. Improvement but not strong enough.
• German inflation data painted similar picture. Flash reading showed that Germany is not in deflation but improvement is weak with no price growth in October from September.

This meager improvement in inflation is unlikely to stop European Central Bank (ECB) to take more aggressive stance. ECB is unwillingly to take the mandate loosely and President Draghi has indicated that headline inflation is the policy mandate not the core components.

Euro is currently trading at 1.093 against Dollar.

Chart courtesy Zoe Schneeweiss, Bloomberg economy editor.