Non-energy goods prices in Euro area might enter a new upturn cycle

It seems that Euro area's non-energy goods are entering a new upturn cycle as they tend to follow the trade-weighted euro and business cycles. Upturn cycles took place during 2000-04, 2006-10 and 2011-14, while 2005-07, 2010-11 and 2014-15 saw cycles of slower growth. 

Prices have increased steadily since January 2015, led by a broad-based upturn across components, the durable goods component has gained 1.1pp, semidurables have gained 0.5pp and non-durables 0.1pp. 

"The improvement witnessed thus far is likely to continue due to the expected pass-through of the weaker euro, although the acceleration will probably be subdued", says Societe Generale.