A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.



Eurozone FIG Eases a Bit

Price pressures in the euro zone eased in December and look set to remain subdued in coming months, an index compiled by the Economic Cycle Research Institute showed on Friday.

ECRI, which designs indices aimed at predicting business cycles in leading economies, said its Eurozone Future Inflation Gauge slipped to 93.5 in December from a revised 93.9 in October. The index has risen from a revised 91.5 in June.

"However, the (index) remains well below its 2000 high, suggesting that euro zone inflation will remain subdued in the coming months," ECRI said.

The euro zone gauge aims to anticipate cyclical swings in the region's inflation rate and changes in official interest rate policy by measuring underlying inflationary pressures, rather than actual inflation rates.

It is similar to ECRI's inflation indices for the United States, Britain and Japan.

The gauge for Germany fell to 78.1 in December from a revised 79.3 in November ECRI said.

Price pressures fell too in Italy, to 98.6 from a revised 99.1. ECRI said the (Italian index) was still in a modest upswing, "suggesting that Italian inflation will remain relatively tame in the coming months."

The French index edged up to 101.9 from a revised 101.8, but ECRI said it indicated French inflation pressures were still in a cyclical downturn.

The Spanish index rose to 120.4 in December from a revised 118.6. ECRI said it had begun to trend upward in recent months, but "Spanish inflation is likely to remain mild in the coming months."

The euro zone gauge uses a weighted average of ECRI's indices for Germany, France, Italy and Spain.