Final German HICP inflation to confirm flash estimates

Flash German HICP inflation was at 0.7% yoy in May after its reading of 0.3% yoy in April. The national measure also came in at 0.7% yoy, up from 0.5% yoy in April. 

As for the details, the energy component explained half of the quickening, as expected. Energy price inflation rose from -5.9% yoy to 5.0% yoy, adding 10bp to headline inflation. 

The food component rose from 1.1% yoy to 1.4% yoy in May, adding 3bp. Among the core components, price inflation for non-energy, non-food goods was unchanged at 0.9% yoy, while services prices quickened from 1.4% yoy to 1.5% yoy, adding 6bp to the headline figure. According to estimates, core inflation has accelerated slightly, from 1.2% yoy to 1.3% yoy in Germany. 

"We expect German HICP inflation to average 0.5% in 2015 and 1.7% in 2016, while the core metric should remain stable at 1.2% in 2015 and 1.4% in 2016", says Societe Generale.