Below is a chart and excerpt from today's Early Look written by Director of Research Daryl Jones.
At the moment, the difference between Eurozone CPI and PPI is -29.8. As the chart shows, this is like nothing we’ve seen in the last 25+ years. In fact, at the moment this divergence has a Z-score of -6.5, a reading this high is extremely rare.
Ultimately, CPI will likely narrow the gap with PPI and provide consternation for the ECB, whose policy makers have been relying on the other global central banks to do their monetary tightening dirty work.