• German producer prices -0.5% vs +0.3% m/m expected
• Prior -0.6%; revised to -0.1%

This will arguably be the last report before it all changes up due to the Middle East conflict. As such, I wouldn’t look much into this as the data is rather dated at this point in time. The main drag for the lower producer prices in February was due to energy prices. That is seen down 1.8% on the month and down 12.5% compared to February 2025.

Yes, the script will flip when we get to March due to a surge in European gas prices surely. So, this latest report here can be discarded as a thing of the past.

Besides the point on energy prices though, German producer prices actually held up more strongly in February. If excluding energy, producer prices were seen up 0.2% on the month and 1.0% year-on-year.

The breakdown shows an increase in prices for capital goods (+0.2%), consumer goods (+0.1%), and intermediate goods (+0.3%).

So, do keep in mind that the price trend for other sub-indices is already showing some stubbornness. And when you have to pair that with higher energy prices to come in the months ahead, that points to worrying inflation developments for Europe’s largest economy.

It is no wonder that Nagel is warning that a rate hike is needed as early as next month here.