EU Factory Prices Fall With Low Commodity Prices

December 2, 2014 Share Print 0

Euro zone factory prices fell at their sharpest monthly rate in a year in October as the cost of energy and non-durable goods such as food dropped sharply, putting pressure on the European Central Bank to do more to lift the bloc’s depressed economy.

Prices at factory gates in the 18 countries sharing the single currency declined by 0.4 cent from September, the European Union’s statistics office Eurostat said on Tuesday.

Economists polled by Reuters had forecast a 0.3 percent drop.

The figure was pulled down most by a 0.9 percent drop in energy costs and by a 0.6 percent decline of non-durable goods prices, depressed by the slide in oil and commodity prices.

October’s fall in producer prices feeds into of the euro zone’s wider problem with deflationary pressures. Factory prices have only risen in June and September this year.

On an annual basis, prices fell 1.3 percent in October, in line with market expectations and a slightly lower pace than the 1.4 percent slide seen in both August and September. Only prices of capital and durable consumer goods rose.

The steepest annual declines were seen in Slovakia, Estonia and the Netherlands.

via Reuters

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.