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 Inflation Eases

Underlying price pressures in the euro zone eased in February as inflationary influences fell in Germany and Spain, an index compiled by the Economic Cycle Research Institute (ECRI) showed on Friday.

ECRI, which designs indices aimed at predicting business cycles in leading economies, said its Eurozone Future Inflation Gauge fell to 95.3 in February from 96.2 in January.

"The (gauge) has eased from October's 41-month high, and remains restrained," ECRI said. "Thus inflation in the euro zone is likely to be subdued
in the months ahead."

The official preliminary estimate for euro zone inflation in March was 2.1 percent, unchanged from February and just above the European Central Bank's 2.0 percent target ceiling.

The ECRI 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 February from an upwardly revised 79.4 in January...

"If the downtrend in the (gauge) continues, German inflation is likely to ease further in the coming months," ECRI said.

In France, the index was unchanged at 101.8, while the Italian index edged up to 99.9 from an upwardly revised 99.8.

The Spanish index dropped to 135.3 from a downwardly revised 139.0,...

"Since the (Spanish gauge) reached its July 2004 high, it has been in a downtrend ... It is likely that Spanish inflation will ease further in the near term," ECRI said.

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